Press Release: 6/26/2026
Governor Healey Halts Data Center Tax Incentive and Calls for Strict Guardrails to Protect Ratepayers, Environment & Public Health
Governor releases one of the most comprehensive frameworks in the nation, covering cost, energy, water, air, noise, jobs and other impacts
FOR IMMEDIATE RELEASE:
6/25/2026
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Jacqueline Manning, Press Secretary
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Call Jacqueline Manning, Press Secretary at (617) 725-4025
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Email Jacqueline Manning, Press Secretary at jacqui.manning@mass.gov
BOSTON — Governor Maura Healey today announced that her administration will pause accepting data center sales tax exemption applications until stronger protections are in place for Massachusetts residents, businesses and communities. The administration is also releasing a comprehensive framework to guide responsible data center development to ensure projects do not drive up energy costs, strain local infrastructure or harm public health and the environment.
The framework outlines clear compliance expectations for data center developers, including that they must fund the full cost of the energy infrastructure and clean energy supply needed to support the project, protect the surrounding environment, water systems, and public health and safety, and ensure that local businesses and residents can benefit from job creation and other investments.
“I am halting any tax incentives for data centers until we have strong protections in place for our residents and communities against higher gas and electric bills,” said Governor Maura Healey. “Data centers can support innovation and economic growth, but if developers want to build in Massachusetts, they need to first demonstrate that they can do so without driving up costs or harming our communities.”
“Data centers wanting to come to Massachusetts should be prepared to work with our communities and deliver real assurances to their neighbors,” said Lieutenant Governor Kim Driscoll. “Data center projects can create jobs and generate local revenue, but they must meet high standards and provide clear benefits for the people who live and work nearby.”
The Massachusetts Qualified Data Center Sales and Use Tax Exemption was created by the Legislature in 2024 and provides a sales and use tax exemption for eligible expenditures incurred during the construction and operation of a Qualified Data Center located in Massachusetts. While the tax exemption launched last month, the Executive Office of Economic Development (EOED) will pause the acceptance of any applications for new data center projects until these guardrails can be put into place.
The framework released today was developed through extensive engagement with community organizations, environmental advocates, labor groups, municipalities, utilities, industry representatives and other stakeholders. It is intended to guide future legislative, regulatory and local decision-making related to data center development.
“Data centers require enormous amounts of energy and grid infrastructure, back-up power, and water – and they can afford to pay for it. That’s why we are calling for comprehensive guardrails,” said Energy and Environmental Affairs Secretary Tepper. “Our framework lays out how data centers should be developed – bring your own clean energy, keep our air and water clean, and foster good jobs and investment in our communities. This framework reflects months of conversation with community groups, energy experts, and labor organizations. Adhering to these principles will give developers a strong foundation on which to build relationships with Massachusetts communities.”
“As data center demand continues to grow alongside public concerns, Massachusetts is taking a thoughtful approach to understanding where the industry is headed,” said Economic Development Secretary Eric Paley. “Our goal is to support investment at the right scale, in the right places, and with the infrastructure needed to drive growth across our leading technology sectors.”
The framework sets out several categories of expectations for data center development:
Energy Supply & Infrastructure
New data centers should follow the “Bring Your Own Clean Energy” model and supply or directly procure or develop the energy resources needed to support their operations. Projects should not increase costs for existing ratepayers or place additional strain on the electric grid. Projects should prioritize, where feasible, on-site deployment of clean energy resources, including solar, storage, geothermal, and other zero-emission technologies.
Developers should also follow industry best practices for energy efficiency and infrastructure planning.
Water Use & Infrastructure Protection
Data centers should be located only where sufficient water supplies, wastewater, and infrastructure capacity exists and provide necessary infrastructure upgrades when necessary. Projects should implement water-efficient cooling technologies and wastewater reuse strategies, including closed-loop systems, where feasible. Water discharges from data centers should not endanger public health or the environment. During drought conditions, usage restrictions should prioritize existing users.
Air Quality & Public Health
Data centers should minimize air emissions, noise and other impacts on surrounding communities. Developers should pursue alternatives to diesel backup generation whenever feasible and implement measures to protect public health.
Labor & Jobs
Projects receiving public incentives should support high-quality jobs, workforce training opportunities and workforce benefits for Massachusetts residents, including project labor agreements or labor peace agreements.
Community Benefits & Engagement
Communities should have a meaningful role in project planning and development. Developers should ensure robust community engagement and communications with residents, including Community Benefits Plans and Agreements using tools developed by the state as part of its new energy siting and permitting rules.
The data center framework was developed based on numerous stakeholder meetings, including with environmental organizations, the Attorney General’s Office, labor groups, environmental justice advocates, community-based organizations, tribes, utilities, data center developers, the tech and business sectors, and municipalities. The full framework is available here.
Statements of Support:
Tristan Thomas, Director of Policy, Alternatives for Community and Environment:
"As data centers expand across Massachusetts and the nation, policymakers must act now to protect already overburdened frontline communities. We welcome the Administration’s expressed commitment to shield ratepayers from costs, advance a clean energy transition and avoid fossil fuel reliance, to avoid and mitigate cumulative burdens including air and noise pollution, to safeguard our water resources, and to support the development of community benefit agreements. ACE appreciates these important commitments and looks forward to supporting state agencies, communities, and other stakeholders in implementation"
Daniel Sosland, President, Acadia Center:
“We appreciate Governor Healey for thoughtfully addressing the economic and competitive issues arising from data centers in a way that prioritizes the very real potential impacts on Massachusetts’ climate, consumers and communities. The continued growth of data centers is a reality that needs a comprehensive response, putting guardrails in place to protect both local host communities as well as energy ratepayers writ large. Massachusetts can be a leader in setting the right framework and criteria to pave the way for clear data center policies that reflect stakeholder interests and ensure their participation in the process.”
Cynthia Mendes, State Director, Clean Water Action:
“Clean Water Action is encouraged that the Healey-Driscoll administration's proposed Data Center Development Framework recognizes the importance of worker benefits and the cumulative impacts these projects can have on communities already burdened by pollution and industrial development. Developers should be required to fully disclose projected energy demand, water use, emissions impacts, backup power systems, and potential costs to ratepayers. Strong standards and accountability measures to ensure that public health, environmental justice, affordability, and community well-being are protected. Vigilant oversight and reporting on wastewater treatment, water resource protection, drought resilience, toxic waste, and full lifecycle water management are important components of this framework. Clean Water Action is hopeful that Massachusetts can lead, by requiring a specific, transparent, and enforceable approach that puts communities and health first and ensures strong guardrails are in place before expansion occurs."
David Melly, Senior Policy Director for the Environmental League of Massachusetts:
"As the Commonwealth works to grow our economy, reduce emissions, deliver affordable energy, and protect our natural resources, policymakers must institute strong guardrails that prioritize responsible siting, ratepayer protections, and a full accounting of impacts from any potential new development. Residents across Massachusetts have made it clear: our top priorities must be lowering costs, protecting public health, and safeguarding clean water. It's encouraging to see progress toward enshrining these values in law when it comes to data centers and other major infrastructure."
Chrissy Lynch, President, Massachusetts AFL-CIO:
"Right now, tens of thousands of highly trained union members across the country are building the data centers that are the foundation for the internet and our increasingly digital economy, and we are ready to take on more. Especially in Massachusetts, every job related to data centers - from supply chain to manufacturing to construction and maintenance - should be a union job. We need rules to ensure that these data centers support union jobs for local people, that they provide their own water and energy, that they pay their fair share of taxes, and that they work with local communities to ensure that the economic benefits are truly felt by those communities. We applaud the Healey Administration for recognizing the need for rules and guidelines for data center expansion that mitigate potential harms while maximizing the economic benefits."
Frank Callahan, President, Massachusetts Building Trades Unions:
“Data Centers are a key component to keeping the Massachusetts’ economy on the cutting edge.  Governor Healey’s framework and guidelines recognize that these facilities should built by the 75,000 highly trained and skilled men and women of Massachusetts’ Building Trades Unions. This ensures the maximum economic benefit – for workers, ratepayers, businesses, and communities.”
Michael Monahan, Vice President, IBEW Second District:
“Data centers are essential to today's economy. The question isn't whether we need them, but where they're built, how they're built, and who builds them. Governor Healey's framework provides the right answers for Massachusetts: data centers that receive public benefits should be built with union labor, ensure residents and ratepayers aren't subsidizing energy or water costs, contribute to local tax bases, and support local and statewide economic growth. Our brothers and sisters are ready to get to work to make sure data centers are built responsibly and to the highest standards.”
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