New Jersey tells towns how to negotiate data center benefit deals and property tax breaks
State guidance lists what towns should cover in community benefits agreements with data center developers, restates labor rules for data center construction, and urges caution on long-term tax exemptions.
Data center developers negotiating with New Jersey towns should now expect municipal officials to arrive with a state checklist covering emergency response, water use, community payments and tax exemptions. On August 25, 2026, the Division of Local Government Services in the New Jersey Department of Community Affairs, which oversees municipal finance, issued Local Finance Notice 2026-13, “Data Centers” (the “Notice”), guidance to municipalities on community benefits agreements, construction labor rules and property tax incentives for data center projects.
N.J. Dep't of Cmty. Affairs, Div. of Local Gov't Servs., Local Finance Notice 2026-13, Data Centers (Aug. 25, 2026); N.J. Stat. Ann. § 40A:20-1 et seq.; N.J. Stat. Ann. § 40:55D-42