Decision made amidst possible removal of tax credit
Amazon has suspended plans for a data center in Becker, Minnesota.
This follows intense discussion in the Minnesota legislature about a budget bill, which could repeal a tax credit for electricity usage in data centers. Governor Tim Walz and members of the Democratic-Farmer-Labor party spoke in favor of this change.
First reported by The Minnesota Star Tribune, Amazon Web Services spokesperson Duncan Neasham said that Amazon had moved ahead with the project based on how quickly it thought it could obtain permits and utility agreements.
But “due to the uncertainty, we are redirecting more of our resources to focus on other projects that can provide capacity to our customers more quickly.”
Significant delays mean that the implementation of the budget bill is still unclear. The legislature officially ended its session on May 19 despite failing to approve the bill, meaning it will have to be passed in an additional legislative session called a ‘special session.’ This has yet to happen.
Senator Andrew Mathews, a Republican member of the Minnesota Senate, said: “Data centers are coming and they can be a valuable asset for our state and local communities.”
“But the policies championed by Governor Walz and Democrats are driving these opportunities away. Instead of creating jobs and economic growth here, they’ll now be built in other states.”
Walz’s support for regulation co-exists with broad support for data centers in the state. When announcing Meta’s plans to open a data center in 2026 near Minneapolis, Walz said that it was “a win for our state that will bring dozens of jobs and invigorate the local economy.”
Currently, the state also offers a sales tax exemption on computers and servers, cooling and energy equipment, and software. It does not tax personal property, inventories, utilities, Internet access, information services, and custom-created software.
Purchased in November 2024, the 350-acre land parcel would have been powered by utility Xcel Energy.
Xcel spokesperson Theo Keith told DCD that “[Amazon] is pausing those plans because of factors independent of our readiness to serve the site’s electricity needs”, and that it remained “optimistic about serving new electricity demand from data centers in a way that benefits our existing customers and communities.
DCD has also reached out to Amazon for comment.
The utilities provider plans to close up to three coal-fired generators at their Sherco Site by 2030. But Ryan Long, president of the company’s Minnesota and Dakota division, said that it may have to extend the life of its natural gas assets to meet growing data center demand.
Several other data centers are planned in the state, such as those operated by Tract, Cerebras, Oppidan, and Archer.
