Rural Data Centers Are in for a Big Federal Tax Break — SkimNews
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- The One Big Beautiful Bill Act expands the federal opportunity zone program beginning January 1, 2026, making rural data center projects newly eligible for specific corporate tax benefits championed by Ways and Means Committee chair Jason Smith.
- Searchlight Institute research, exclusively reviewed by WIRED, identified more than 100 data centers in rural areas that could qualify; separate Pew research found roughly 67% of planned U.S. data center facilities are going rural, though only 13% of operating centers are currently located there.
- Emily Kraschel at the Searchlight Institute warns the program's only requirement is capital investment — there is no mandate that projects create jobs, a poor fit for data centers whose long-term workforce footprint remains contested.
- Senator Josh Hawley introduced legislation last month to eliminate opportunity zone funding for data centers, saying he wants to ensure Big Tech companies don't get tax breaks to build on farmland.
- Microsoft, Meta, and Amazon all denied using the opportunity zone program for their data centers, and Google did not respond — but because the tax data is considered confidential IRS information, actual participation is virtually impossible to verify unless companies voluntarily disclose.
- The expanded rural opportunity zone program is projected to cost an estimated $40.9 billion over the next decade, and past research suggests many projects receiving opportunity zone benefits would have been built even without the federal incentive.
Why it matters: Rural counties stand to attract investment capital while ceding leverage to demand local benefits, since the $40.9 billion opportunity zone expansion requires only capital deployment, not jobs. With public backlash intensifying and Big Tech denying participation while IRS confidentiality shields actual usage from scrutiny, taxpayers may end up subsidizing projects that would have been built anyway.
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