SZALINSKI’S SUMMARY: Illinois committed an estimated $666.6 million in tax credits to data center projects through 2025, according to an annual Department of Commerce and Economic Opportunity report. The agreement, which spans periods up to 20 years, were inked before Gov. JB Pritzker directed the department to pause processing new data center incentives beginning Wednesday.
WHY IT MATTERS: Data centers are under intense public scrutiny for a variety of reasons, including how much space they occupy, resources they use and even the noise they make. Illinois lawmakers are debating new regulations, but the report shows the state has already committed hundreds of millions of dollars in credits since 2020.
Data center tax incentives were included in a bipartisan law Pritzker signed in his first year in office as part of the only budget that garnered Republican support in his two-term tenure.
2025 BY THE NUMBERS: The latest report shows seven data centers inked deals in 2025, pledging to invest a combined $2.6 billion in Illinois to receive $159.9 million in tax benefits. This includes four sites in Elk Grove Village, including a new data center built by Oracle, and a controversial center built by T5 in Grayslake.
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Altogether, developers committed $10.7 billion to build 34 data centers in Illinois through 2025. According to DCEO, the estimated total value of the tax breaks is worth 6.25% of the project’s investment. The sites have also committed to creating 731 new jobs.
DISCLAIMER: The $666.6 million in total estimated tax credits through 2025 is lower than the $983.2 million DCEO reported through 2024 in a report released last summer. The 2025 report shows the value of credits for several sites has changed — much of it tied to a single DeKalb data center that could be attributable to an error in the previous report. DCEO did not immediately respond to a question seeking an explanation for why.
DIGGING DEEPER: The state exempts the projects from a variety of taxes and provides a 20% tax credit on the wages of construction workers on the project. Projects are eligible to receive the credits for 20 years and must invest at least $250 million, create at least 20 jobs with wages at least 120% of the median county wage, and obtain a carbon neutral or green energy certificate within two years.
WHERE THEY ARE: All the data centers receiving tax incentives are located in the Chicago area and 14 of the 34 sites are in Elk Grove Village — an already heavily industrial community west of O’Hare Airport. Several are located in Chicago while others are spread throughout the suburbs. The furthest from the city is in DeKalb.
NOT INCLUDED: A new 795-acre data center in Joliet that was approved in March is not yet part of the DCEO’s annual report. It would be the largest facility in the state. The Grayslake project, already under construction, will be the second-largest.
Another site in Sangamon County was also approved in April and will be a $500 million investment by CyrusOne.
POLITICS: Many Americans oppose data centers, according to a June poll by Reuters. Voters in both parties expressed concerns about data centers, including three-quarters of respondents who said they worried data centers will make electricity more expensive.
Pritzker directed DCEO in early June to pause processing data center tax credits beginning July 1 after the legislature declined to put a moratorium on the credits — something House Speaker Emanuel “Chris” Welch, D-Hillside, told Capitol News Illinois that many members of his caucus didn’t support.
Pritzker’s unilateral move angered labor unions and the Illinois AFL-CIO issued a statement last month saying they plan to withhold endorsements for November’s election as they take a closer look at who deserves them.
Data centers regulations could be on lawmakers’ agenda in the fall veto session, but first, it’s shaping up to be a key issue in midterm elections.
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