Colorado Legislators Debate Data Center Tax Breaks and Energy Rules

The Government of Colorado began debating the future of data center expansion during the week of February 9, 2026. The legislature is considering two opposing approaches to attract and regulate the industry within the state.

House Bill 1030, which was scheduled for a House Energy and Environment Committee hearing on Thursday, proposes a 100% sales and use tax exemption for 20 years. To qualify for these breaks, companies must invest at least $250 million and meet specific job creation quotas.

In opposition to the incentive-heavy approach, Senator Cathy Kipp and several environmental groups are backing a competing bill. This alternative legislation would mandate that data centers match their total energy use with renewable energy credits to mitigate the environmental impact of high power consumption.

Other legislative priorities for the week included Senate Bill 2, focusing on electricity costs for low-income residents, and Senate Bill 9 regarding nonprofit tax exemptions. Additionally, the Legislative Audit Committee met to review the state's comprehensive financial report and single audit.