When governments give favored corporations bailouts, grants, and tax breaks, they direct taxpayers鈥� money away from the public good to private interests. Politicians often say they oppose corporate welfare, but they need to prove it, not in words, but in actions. Luckily for them, Colorado legislators have an opportunity to do so this session.
They should vote against , which would encourage technology companies to build their data centers in the state by offering them a 100% state sales and use tax exemption on qualified purchases for at least 20 years. The tax loophole would decrease the state鈥檚 general fund revenue by .
While the giveaway might persuade tech companies to say yes to Colorado, it抖阴ap one more reason residents should say no. Data centers that house computers for artificial intelligence and data storage consume enormous amounts of energy and water and create comparatively few jobs. Moreover, favoring big tech over other enterprises is inherently unfair to all those businesses that pay their state sales and use taxes.
Supporters say they want Colorado to be as competitive in drawing data centers to the state as the 38 states that already offer such tax breaks. Jacob Bock, a vice-president at a Denver-based data center development company, said companies like Meta, Amazon, and Microsoft would love Colorado, but for, the lack of a state-level sales and use tax exemption. Last I checked, these companies were worth trillions. Why exactly can鈥檛 they pay sales tax like every small and medium size company that locates here?
Advocates for the bill note that it requires companies to meet certain commitments to be certified for the tax break, such as creating new full-time jobs, obtaining certification under one of several energy efficiency standards, acquiring new generation capacity from clean energy sources, optimizing operational water management, and other criteria. That抖阴ap nice.
First of all, data centers aren鈥檛 exactly job creation powerhouses. A study by University of Houston and University of Notre Dame researchers found 鈥渘o clear empirical evidence that data centers stimulate local tech-related employment growth.鈥� Once construction is complete, data centers employ on average 27 full-time employees, the same as a busy chain restaurant. A hyperscale data center may employ over 100 people, less than a Walmart.
While big tech programmers make six figures and big tech CEOs make millions, data center technicians here in Colorado make $27 an hour, according to ZipRecruiter. In the end, a Costco with 300 employees making an average of $23 an hour would bring more economic activity to a location than a data center.
Data centers also consume an inordinate amount of energy and water. Large centers use up to 5 million gallons a day of water and 20 to 100-plus megawatts of power continuously, enough to power 16,000 to 80,000-plus homes. While data companies are working to reduce power and water consumption, they should beta test those solutions elsewhere before locating to a water-parched state like ours.
Lastly, HB 1030 is unjust to all the businesses that bring prosperity and jobs to this state and manage to pay their fair share of taxes. If the legislature truly wants to make Colorado a desirable destination for companies, there are more ethical ways to do so.
A Colorado Chamber of Commerce report last year found that the number of state-level business restrictions grew to over 205,000 by the end of 2025, earning Colorado the dubious distinction of being the sixth most regulated state in the country. The legislature can lighten the regulatory yoke on all businesses rather than play favorites with a few.
Krista Kafer is a Sunday Denver Post columnist.
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