(KNSI) – Amazon is suspending its plans for a massive data center in Becker after state lawmakers propose reductions in corporate tax breaks for such projects.

The move struck a blow to the central Minnesota town facing the loss of the Sherco coal-fired power plant in 2030 and saw the data center as a chance to replace some of that lost tax base. The project likely would cost billions to build, resulting in many construction jobs. It’s the second time this has happened. In 2022, Google abandoned a $600 million project plan at the Sherco site.

Last week, leaders in St. Paul decided to eliminate a sales tax exemption on electricity for data centers. The tax break saved data centers about $100 million a year statewide, but is only expected to grow as more centers come online. Some DFL lawmakers argue wealthy companies like Amazon don’t need the tax breaks and that it amounts to corporate welfare. The exemption is still in place for computers, cooling equipment, servers, and software.

Minnesota Republican Senator Andrew Mathews represents the area issued a statement saying, “I’m incredibly frustrated that a major economic lifeline for the Becker community has effectively stalled. Earlier this session, Governor Walz rolled out the red carpet for Amazon and pledged to support their investment in Minnesota. But when it came time to act, the Governor and legislative Democrats repeatedly stonewalled the project. I’ve fought all session to pass policies that give regulatory certainty and stability to help these projects come here, but the Governor’s proposal last week to repeal the data center’s sales tax exemption on electricity appears to be the final straw. As for Becker, I remain committed to making development and growth easier.”

Amazon hasn’t ruled out revisiting the project. A statement from the company says the plan is to keep 348 acres of land that it purchased in the town for $73.5 million in 2024.

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