Indianapolis, February 5, 2026
The Indiana House has approved House Bill 1333, designed to stimulate economic growth by attracting data centers to the state. The bill includes provisions for local governments to share in sales tax revenues and streamlines the development process. While the legislation could significantly benefit local economies, some officials express concerns over land-use control and environmental impacts. The bill now advances to the Senate for further review.
Indianapolis, Indiana – February 5, 2026
Indiana House Passes Bill to Attract Data Centers
New legislation aims to enhance local economies through streamlined processes and revenue sharing.
The Indiana House of Representatives has taken a significant step towards boosting economic growth by passing House Bill 1333, which seeks to attract more data centers to the state. This innovative approach not only offers local governments a share of the sales tax revenue generated by data centers but also simplifies the approval process for new developments. As the bill now heads to the Senate for further deliberation, the implications for Indianapolis and surrounding communities could be substantial.
Data centers are pivotal in today’s digital economy, providing essential services for cloud computing and data storage. Indiana’s proactive stance on attracting these facilities reflects a commitment to fostering an entrepreneurial environment that reduces regulatory burdens for businesses. Local officials and residents alike stand to benefit from the new job opportunities and revenue streams such infrastructure can provide, underscoring the importance of legislative measures like House Bill 1333.
Key Provisions of House Bill 1333
- Sales Tax Revenue Sharing: The bill mandates that data centers contribute at least 1% of their sales tax savings back to local governments. This introduces a new fiscal resource to communities that host these vital facilities.
- Streamlined Approval Process: Under this legislation, data centers can be established on certain agricultural lands classified between Class 4 and Class 8, expediting development without the need for zoning changes or public hearings.
Concerns from Local Officials
Despite the potential benefits, not all local officials are on board with the bill. Some have raised alarms about losing local control over land use and expressed worries regarding the environmental implications of rapidly industrializing previously agricultural areas. These officials argue that the legislation could permit unchecked growth without adequate community engagement.
Background Context on Data Centers in Indiana
Indiana has been actively courting data centers, recognizing their crucial role in supporting the escalating need for digital services. In a move that demonstrated the state’s commitment to enhancing its economic profile, Indiana exempted data centers from a 7% sales tax in 2019, incentivizing investment in the region. Furthermore, in 2025, the Indiana Economic Development Corporation extended $168 million in tax incentives to four data centers, reinforcing the state’s strategic position in the burgeoning digital economy.
Next Steps for House Bill 1333
With the Indiana Senate set to review House Bill 1333, the future of data center development in the state hangs in the balance. Should the bill receive Senate approval, it will proceed to the governor for final ratification. The implications of this bill could reshape Indiana’s economic landscape and dictate how the state fosters technological infrastructure moving forward.
Frequently Asked Questions (FAQ)
What is House Bill 1333?
House Bill 1333 is legislation passed by the Indiana House of Representatives that aims to attract more data centers to the state by offering local governments a share of sales tax revenue and streamlining the approval process for such developments. The bill now moves to the Senate for further consideration.
What are the key provisions of House Bill 1333?
The key provisions of House Bill 1333 include:
- Sales Tax Revenue Sharing: Data centers will contribute at least 1% of their sales tax savings to local governments, providing a new revenue stream for communities hosting these facilities.
- Streamlined Approval Process: The bill allows data centers to be built on agricultural lands classified between Class 4 and Class 8 without requiring zoning changes or public hearings, expediting the development process.
What are the concerns raised by local officials regarding House Bill 1333?
Some local officials have expressed opposition to the bill, citing concerns over the loss of local control and potential environmental impacts. They argue that the legislation could lead to rapid industrialization without sufficient community input.
What is the background context of data center development in Indiana?
Data centers are large-scale facilities that house computer systems and associated components, such as telecommunications and storage systems. They are essential for supporting the growing demand for digital services and cloud computing. Indiana has been actively seeking to attract data centers to boost its economy and technological infrastructure. In 2019, the state exempted data centers from the 7% sales tax to make it more attractive for companies to invest in the region. Additionally, in 2025, the Indiana Economic Development Corporation approved $168 million in tax incentives for four data centers, aiming to bolster the state’s position in the digital economy.
What are the next steps for House Bill 1333?
House Bill 1333 will now be reviewed by the Indiana Senate. If passed, it will be sent to the governor for final approval. The outcome of this legislation could significantly impact the future development of data centers in Indiana and the state’s economic landscape.
Key Features of House Bill 1333
| Feature | Description |
|---|---|
| Sales Tax Revenue Sharing | Data centers will contribute at least 1% of their sales tax savings to local governments, providing a new revenue stream for communities hosting these facilities. |
| Streamlined Approval Process | The bill allows data centers to be built on agricultural lands classified between Class 4 and Class 8 without requiring zoning changes or public hearings, expediting the development process. |
| Local Officials’ Concerns | Some local officials have expressed opposition to the bill, citing concerns over the loss of local control and potential environmental impacts. They argue that the legislation could lead to rapid industrialization without sufficient community input. |
| Background Context | Data centers are large-scale facilities that house computer systems and associated components, such as telecommunications and storage systems. They are essential for supporting the growing demand for digital services and cloud computing. Indiana has been actively seeking to attract data centers to boost its economy and technological infrastructure. In 2019, the state exempted data centers from the 7% sales tax to make it more attractive for companies to invest in the region. Additionally, in 2025, the Indiana Economic Development Corporation approved $168 million in tax incentives for four data centers, aiming to bolster the state’s position in the digital economy. |
| Next Steps | House Bill 1333 will now be reviewed by the Indiana Senate. If passed, it will be sent to the governor for final approval. The outcome of this legislation could significantly impact the future development of data centers in Indiana and the state’s economic landscape. |
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