Illinois data center tax-incentive pause (DCEO, July 2026)
Illinois — Gov. Pritzker Directs DCEO to Pause New Data Center Investment Program Tax-Incentive Agreements From July 1, 2026, and Outlines a Seven-Point Data Center Framework (June 2026)
Illinois · Office of Gov. JB Pritzker, 'Gov. Pritzker Pauses New Data Center Tax Incentives' (June 5, 2026); Data Center Investment Program pause effective July 1, 2026
- Status
- In effect
- Took effect
- July 1, 2026
- Applies to
- Illinois DCEO (no new Data Center Investment Program agreements from July 1, 2026); data center developers seeking new incentives
- Enforced by
- Illinois Department of Commerce and Economic Opportunity
Illinois Gov. JB Pritzker told the state Department of Commerce and Economic Opportunity to stop processing new agreements under the Data Center Investment Program, the state's data center tax-incentive program, starting July 1, 2026. Agreements signed before July 1 will be honored. He also set out a seven-point framework he wants lawmakers to pass, covering data centers paying their own grid costs, clean energy, water permits, air quality and community transparency. The pause does not ban data centers; the regulations require legislation, which did not pass in the spring session.
Who is protected: Illinois ratepayers, taxpayers and communities near proposed data centers
Legal detail
Governor's directive to DCEO announced June 5, 2026: pause processing agreements for the Data Center Investment Program effective July 1, 2026; all agreements entered into with DCEO before July 1, 2026 honored. The press release gives no end date; Capitol News Illinois says the pause fulfils a proposal from his budget address earlier in 2026. Framework for legislation: (1) fair share costs — a data center rate class, infrastructure costs assigned to data centers, efficiency requirements; (2) the incentive pause; (3) interruptible service during grid strain for data centers without self-supplied clean energy; (4) data centers generate or pay for their own clean energy; (5) comprehensive water permits and sustainable use/reuse; (6) strong generator air standards and cumulative impacts in environmental justice communities; (7) ban on nondisclosure agreements with local governments, public notice, energy/water reporting and community benefits agreements. Capitol News Illinois: the program stems from 2019 legislation; 27 data centers received over $983 million in incentives 2020-2024; the POWER Act (HB 5513) did not advance before the May 31 deadline. NOT ESTABLISHED: whether a formal numbered executive order was issued (the release describes a directive to DCEO); statutory citation.
Key facts
| Jurisdiction | Illinois |
|---|---|
| Level | State |
| Strength | Moderate |
| Enacted | June 5, 2026 |
| Citation | Office of Gov. JB Pritzker, 'Gov. Pritzker Pauses New Data Center Tax Incentives' (June 5, 2026); Data Center Investment Program pause effective July 1, 2026 |
| Private right of action | No, agency enforcement only |
| Penalties | None (administrative pause of incentive agreements) |
| Topics | data-center siting and energy · consumer protection · government use of AI |
| Agency page | Gov. Pritzker Pauses New Data Center Tax Incentives — Office of the Governor newsroom (June 5, 2026) |
More AI rules in Illinois
- Illinois Children's Social Media Safety Act — algorithmic recommendations ban for minors · Enacted (not yet in effect)
- Illinois SB 3114 — Transparency in Downcoding Act · Enacted (not yet in effect)
- AI Safety Measures Act (frontier model audits) · Enacted (not yet in effect)
- Algorithmic rent price-fixing ban · Expired
- Illinois HB 3851 — deepfake cyberbullying in schools (2026) · In effect
- IL AV local-preemption (2017) · In effect
Related data-center siting and energy rules elsewhere
- Superior WI Data Center Moratorium (1-year) · In effect
- Dane County WI Hyperscale Data Center Moratorium · In effect
- Madison WI Data Center Moratorium (1-year) · In effect
- Manitowoc County WI Data Center Moratorium · In effect
- WA SB 5982 (Data Center / Clean Energy) · In effect
- Dayton OH data center moratorium (180-day, Apr 2026) · In effect
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