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HB 560

Sales and Use Tax and Property Tax - Exemptions for Data Centers - Repeal

2026 Regular Session Introduced by Gabriel Acevero and 19 co-sponsors

Maryland bill eliminates tax exemptions for data centers, increasing operating costs for facilities but generating additional state and local tax revenue.

Hearing 2/12 at 1:00 p.m.
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Bill Summary · HB 560

Legislative bill overview

HB 560 repeals existing sales, use, and property tax exemptions previously granted to data center facilities in Maryland. The bill eliminates preferential tax treatment that was designed to incentivize data center development and investment in the state.

Why is this important

Data centers represent significant economic activity and infrastructure investment. This repeal would increase operating costs for data center operators in Maryland, potentially affecting their competitiveness compared to facilities in other states offering similar tax incentives. The change could generate additional state and local tax revenue but may discourage future data center projects or prompt relocation of existing operations.

Potential points of contention

  • Economic competitiveness: States with aggressive data center tax incentives (Virginia, Pennsylvania, North Carolina) may attract investment that Maryland would otherwise receive, potentially offsetting any tax revenue gains
  • Job and infrastructure impact: Data centers create high-value infrastructure and employment; removing incentives could slow facility expansion or modernization that communities depend on
  • Revenue timing vs. cost: While repeal increases tax revenue, it may reduce the total economic activity and long-term tax base growth that data center expansion would generate

Compiled from official sources — confirm details with the bill’s official record.

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