Michigan: Michigan Lawmakers Propose Eliminating Data Center Tax Breaks

Legislators in Michigan are attempting to decrease the tax exemptions provided to data centers. In December of 2022, Yousef Rabhi, a Democrat from Michigan, presented two proposals to repeal sales and use tax breaks for data centers. Current Michigan legislation exempts data centers from sales and uses tax from 2016 through 2035 for certified data centers. The recently introduced House Bill 6561 would eliminate use tax, while House Bill 6559 would eliminate sales tax exemptions after 2021. 

Both proposals were submitted on December 7, have completed their initial reading, and have been submitted to the Tax Policy Committee. 

The two proposals also have bipartisan backing; Dems Abraham Aiyash, Darrin Camilleri, William Sowerby, and Laurie Pohutsky, and Republicans Sue Allor, Steven Johnson, and Steve Carry are named as co-sponsors. Rep Rabhi has previously opposed tax credits granted to Switch Inc. for its Grand Rapids Pyramid site. In 2019, at the time of the passage of a new bill, he stated that it was "wrong to leave our small enterprises on the curb" in favor of wealthy corporations with the ability to influence legislation.

At the time, he stated that the proposals represented the epitome of corporate cronyism.