Rural Data Centers Are in for a Big Federal Tax Break — SkimNews
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- The One Big Beautiful Bill Act expands opportunity zone tax benefits to rural data center projects starting January 1, with the expansion estimated to cost $40.9 billion over the next decade
- Searchlight Institute research identified more than 100 data center projects in rural areas that could qualify for the new tax benefits, and separate Pew research found that 67% of planned facilities are now going rural
- Searchlight's Emily Kraschel warned the program only requires capital investment, not job creation, and that "with a data center, that assumption [of local jobs] goes a little wonky" compared to a traditional factory
- Microsoft, Meta, and Amazon all denied using the opportunity zone program for their data center development when contacted by WIRED; Google did not respond to requests for comment
- Senator Josh Hawley introduced legislation last month to eliminate opportunity zone funding for data centers, claiming he would help "ensure Big Tech companies don't get tax breaks to build data centers on farmland"
- University of Texas-Austin's Nathan Jensen said he would be "very surprised" if some companies weren't siting in rural opportunity zones specifically for the tax benefits, calling it "essentially free money"
- The program comes as data center backlash is intensifying—Amazon recently tried to negotiate a lower tax bill on a Mississippi facility, and Meta has been writing off data center equipment under a federal R&D tax break, per the New York Times
Why it matters: A $40.9 billion rural tax break program that requires only capital investment—not jobs—will subsidize data center projects that critics argue would have been built anyway, and Hawley's bill to strip data centers from the program signals bipartisan friction over who actually captures the value of these subsidies.
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