A new bill in the Montana Senate has proposed increasing tax rates on data center properties across the state.

SB32 was introduced on Monday by Senator Jeremy Trebas, a Republican senator representing Great Falls.

The legislation would raise taxes on qualified data center property from 0.9 percent to 1.5 percent of such property's market value.

According to the state Legislature's website, the bill was filed in December and had its first reading on Monday.

If enacted, the legislation would apply to property tax years starting after December 31, 2025.

The story was reported first by Law360.

Montana is one of the smaller data center markets in the US. Seven organizations operate nine data centers in the state, including iConnect Montana, which has three facilities. Other operators include Parsec Data Management, Montana Opticom, and Advanced Communications Technology. The state's data centers are located in Billings, Missoula, and Great Falls.

Two of these facilities are carrier-neutral, and two provide individual server hosting. However, none offer rack cabinets.

Montana’s data center market has real growth potential despite its limited development. Its several advantages make it an attractive destination for data centers, including a cool, dry climate, low risk of natural disasters, location between two major data center regions, and ample affordable land within reasonable fiber and power generation distances.

In December, Northwestern Energy signed two energy supply agreements with data center developers in Montana.

They included a 75MW agreement with Atlas Power to supply its flagship data center in Butte and a 50MW supply agreement with an undisclosed data center operator.

The state has several cryptomining data center developments. In August 2023, Sentinum broke ground on a 20MW cryptomining facility in Montana.