A recently-implemented tax policy in Wisconsin that exempts data center equipment, software and other costs from state sales and use taxes has become a “linchpin” in spurring data center development in the state, according to Aaron Bilyeu, chief development officer of Cloverleaf Infrastructure, which is proposing a sprawling data center campus in Port Washington.

Cloverleaf’s project is part of a growing list of large scale data centers planned or under construction in the state, with officials announcing this week that Microsoft plans to build a new data center in Kenosha that would be built in addition to its multi-billion project in Mount Pleasant already underway, and, last week, a New York-based company announced a multi-million project in Wisconsin Rapids.

In 2023, the state’s biennial budget, approved by the Legislature and signed into law by Gov. Tony Evers, included a provision that offers tax exemptions on dozens of materials needed to construct and operate data centers like servers and other computer equipment, parts and upgrades, software, electricity and electrical connections, cooling equipment, water conservation systems, and any other property as determined by the Wisconsin Economic Development Corp., according to state documents.

“When you start adding in the cost of the servers, these projects can be in the tens of billions of dollars, so these taxes are not an insignificant amount of money,” Bilyeu told BizTimes. “It’s why places like Colorado don’t have any big data centers.”

Read more at BizTimes Milwaukee.