Overview
Rhode Island introduced legislation in 2025 to offer property and sales tax exemptions to large data centers willing to invest at least $200-400 million and sign long-term agreements. The proposal stalled in committee after the state tax administrator raised concerns. Currently, data center developers must navigate standard municipal zoning, air emissions permits for backup generators, and stormwater construction permits.
Incentives
Qualified Data Centers Location Incentive (proposed)
House Bill 6097 and Senate Bill 921 would create a Rhode Island Commerce Corporation program granting property and sales tax exemptions to qualified data centers.[1][2]
- Minimum investment: $200 million within five years if sited in an enterprise zone or federal opportunity zone; $400 million otherwise
- Agreement term: 30-50 years, including coverage for subsequent owners, operators, and colocation tenants
- Annual administrative fee: up to $25,000 paid to the Commerce Corporation
- Additional exemption from any state financial transactions tax or fee
- Host municipality fee agreement required before construction begins; noncompliance risks termination and back taxes
Providence Business News reported in August 2025 that the proposal was tabled after the state tax administrator raised concerns, leaving the legislation in limbo.[3]
Requirements and Conditions
Municipal Zoning Approval
Rhode Island’s zoning enabling act requires every municipality to adopt a zoning ordinance with defined procedures and zoning maps.[4] Local zoning approval is the primary siting hurdle for data center projects.
Air Emissions Permits
The Department of Environmental Management’s Office of Air Resources regulates stationary sources of air pollution, including backup generators at data centers.[5][6] Projects must secure preconstruction and operating air permits before beginning operation.
Stormwater Construction Permitting (RIPDES)
Construction activity that disturbs land requires authorization to discharge stormwater under Rhode Island’s RIPDES general permit.[7] The publicly archived permit shows a September 25, 2025 expiration date; developers should confirm the current permit in effect for 2026.
What to Watch
- Whether the Qualified Data Centers Location Incentive bills (H6097/S0921) are revived in a future legislative session or remain stalled
- Any reissuance or amendment to the RIPDES construction general permit following its September 2025 expiration
Sources
[1] Rhode Island General Assembly, “H6097 (2025) - Qualified Data Centers Location Incentive,” March 14, 2025, https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H6097.pdf (accessed January 8, 2026).
[2] Rhode Island General Assembly, “S0921 (2025) - Qualified Data Centers Location Incentive,” March 28, 2025, https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S0921.pdf (accessed January 8, 2026).
[3] Matthew McNulty, “Data center incentive bill stalls after tax administrator raises red flags,” Providence Business News, August 1, 2025, https://pbn.com/data-center-incentive-bill-stalls-after-tax-administrator-raises-red-flags/ (accessed January 8, 2026).
[4] Rhode Island General Laws, ”§ 45-24-32. Contents of zoning ordinances,” https://webserver.rilegislature.gov/Statutes/TITLE45/45-24/45-24-32.HTM (accessed January 8, 2026).
[5] Rhode Island Department of Environmental Management, “Air Resources,” https://dem.ri.gov/environmental-protection-bureau/air-resources-oar (accessed January 8, 2026).
[6] Rhode Island Department of Environmental Management, “Air Permits,” https://dem.ri.gov/environmental-protection-bureau/air-resources/air-permits (accessed January 8, 2026).
[7] Rhode Island Department of Environmental Management, “General Permit for Stormwater Discharge Associated with Construction Activity (RIPDES),” Effective September 26, 2020 (expires September 25, 2025), https://www.epa.gov/system/files/documents/2025-06/finalrir100000construction-gp-2020.pdf (accessed January 8, 2026).