The One Big Beautiful Bill Act expands a tax program to include rural data centers, making them eligible for corporate tax benefits starting next year. The move is expected to make the economic case for building data centers in rural areas more compelling, according to a statement from Ways and Means Committee chair Jason Smith.
The new rules allow companies to qualify for tax benefits by investing in rural areas, though experts warn that this doesn't guarantee job creation or local economic boosts. Emily Kraschel, a tax policy analyst at the Searchlight Institute, noted that the requirement for capital investment doesn't ensure that the money translates into meaningful local economic impact.
The opportunity zone program, originally designed for low-income census tracts, has been expanded to attract more investment to rural areas. Searchlight Institute's research found over 100 data centers in development in rural areas that could qualify for these tax benefits, though other datasets suggest the number could be closer to 1,500.
"Right now, the only requirement to get the benefits is capital investment," said Kraschel. "However, that doesn't guarantee that that money is necessarily creating jobs or creating a local economic boost."
The program has faced backlash, with some lawmakers pushing to eliminate the tax benefits for data centers. Senator Josh Hawley introduced legislation to stop funding for data centers in opportunity zones, arguing that it would prevent Big Tech from getting tax breaks for building on farmland.
Companies like Microsoft, Amazon, and Meta have denied using the opportunity zone program for their data centers, though they are developing facilities in areas that could qualify. "We have not used this program for our site selection and have no plans to add it to our criteria for our future decisionmaking process," said Amazon spokesperson Julia Lawless.
Source: wired
