House passes legislation that would rein in data center tax breaks; push for repeal continues
Today the House passed House Bill 2650, which would impose strict, enforceable standards on data centers seeking tax incentives in Pennsylvania.
For years, Pennsylvania has handed blank-check sales tax breaks to data center developers with no strings attached, no requirement that they help pay for the power they use, and no transparency, protection, or consideration for the communities living next to these projects.
I am a supporter and cosponsor of Environmental Committee Chair Rep. Greg Vitali’s legislation to eliminate the sales tax exemption for data centers (HB 2198), which passed the House Finance committee by unanimous vote earlier this week. I believe Chair Vitali’s proposal to repeal the tax credit outright is the best and simplest fix. These billion-dollar corporations do not need tax breaks, and we should not be working to attract this energy-hungry and water-intensive industry to our communities. And with a Republican-controlled Senate that has shown no appetite for taking up a repeal bill, I am also supportive of any steps we can take to limit the damage.
The GRID legislation proposed by Gov. Shapiro during his 2026-27 budget address and introduced by my colleague Rep. Joe Webster as HB 2650 attaches meaningful conditions around energy costs, environmental protections, and community input where currently we have none. It shortens the duration of the tax exemption from 25 years to 10 years. It is not a substitute for repeal, but it’s a meaningful improvement over the free-for-all we have today, and I support any serious effort to rein in this industry’s blank check, even as I keep pushing for a more permanent fix.
I voted against the expansion of the data center sales tax exemption in 2021 because then as now, it prioritized corporate profits over the public interest and failed to include any provisions to protect Pennsylvania communities.
GRID isn’t the finish line. It’s a floor, not a ceiling. I can support the guardrails it proposes while I keep advocating for full repeal. The choice in front of us today isn’t GRID vs. repeal; it’s GRID vs. the current free-for-all giveaway to billionaire corporations. Refusing to support any improvement because it isn’t total victory, leaves the current free-for-all fully intact.
Under GRID, for the first time, developers would be required to meet conditions around clean energy sourcing, who pays for grid upgrades, transparency, and community engagement to qualify for a tax benefit that currently comes with no strings attached.
What GRID doesn’t fix: it leaves the underlying tax credit in place for anyone who meets the certification bar. And it doesn’t address the projected cost to the state, which the administration puts at over $500 million a year by FY 2030-31. That’s why I’m still pushing for repeal, while taking the best available step forward today.
With full bipartisan support in the House Finance Committee, Chair Vitali’s repeal bill is expected to easily pass the House this week, leaving it in the hands of the Senate, and specifically Senate Majority Leader Joe Pittman, whether he will heed the concerns of constituents and members of his own party and support full repeal, if he will go part of the way with GRID, or if he will do neither.