Amazon suspends Minnesota data center as lawmakers plan to reduce Big Tech tax breaks

Core Viewpoint - Amazon has suspended its plans for a large data center in Becker, Minnesota, due to uncertainty surrounding tax breaks and regulatory processes [1][2][4]. Group 1: Project Details - The proposed data center was expected to be a significant project for Xcel Energy, potentially costing billions and creating numerous construction jobs [3]. - Amazon's decision to suspend the project is influenced by the Minnesota state lawmakers' negotiations to reduce tax incentives for large-scale data centers [4][5]. - The project would have been the largest among disclosed energy use estimates for data centers in Minnesota [10]. Group 2: Legislative Context - Minnesota lawmakers have agreed to eliminate a sales tax exemption on electricity for data centers, while maintaining exemptions for other equipment [4]. - The current tax breaks for data center companies are valued at approximately $100 million annually, with expectations for significant growth as the industry expands [5]. - Some lawmakers argue that large companies like Amazon do not require tax breaks, labeling them as corporate welfare [7]. Group 3: Local Impact - The suspension of the project is a setback for Becker, which is already facing economic challenges due to the phased closure of Xcel's Sherco coal plant by 2030 [15]. - This marks the second major data center project to be abandoned in Becker, following Google's withdrawal from a $600 million project in 2022 [15]. - Local officials expressed disappointment over Amazon's decision and hope for a reconsideration in future development [3]. Group 4: Regulatory Challenges - The Minnesota Public Utilities Commission previously required Amazon to prove the necessity of backup diesel generators for the data center, complicating the project's progress [11][12]. - Amazon's attempts to ease regulatory requirements faced opposition from some lawmakers concerned about environmental impacts [13]. - Despite the suspension, Amazon has not ruled out revisiting the project and retains ownership of the land purchased for $73.5 million [14].