Rural Data Centers Are in for a Big Federal Tax Break
The One Big Beautiful Bill Act expands federal tax benefits to rural data center projects starting next year, aiming to lower barriers for large-scale infrastructure development. Research indicates that over 100 data centers in rural areas may qualify for these incentives, although experts caution that such projects do not guarantee the same local job creation as traditional manufacturing. Despite the potential for increased investment, political backlash is growing, with some lawmakers proposing legislation to exclude data centers from these opportunity zone benefits.
- ▪New tax benefits for rural data centers under the One Big Beautiful Bill Act take effect on January 1.
- ▪Searchlight Institute research identified more than 100 data center projects in rural areas that could be eligible for the new tax breaks.
- ▪Experts warn that data centers may not create the same level of local employment and economic boost as traditional factories.
- ▪Senator Josh Hawley has introduced legislation to eliminate opportunity zone funding specifically for data centers.
- ▪Companies must create specialized investment vehicles to access the tax benefits, which are considered confidential IRS data.
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Molly TaftScienceOct 4, 2026 6:00 AMRural Data Centers Are in for a Big Federal Tax BreakUnder the One Big Beautiful Bill Act, data center projects in rural areas could be eligible for major tax benefits starting next year. Some hyperscalers do not seem eager to take the free cash.Photo-Illustration: Wired Staff; Getty ImagesCommentLoaderSave StorySave this storyCommentLoaderSave StorySave this storyWelcome back to Power Play! Each week, senior writer Molly Taft tackles a topic around this midterm season’s biggest issue: data centers.
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