Rural Data Centers Are in for a Big Federal Tax Break (wired.com) 28
Wired reports that rural data center projects could become eligible for expanded federal Opportunity Zone tax benefits starting in 2027, with more than 100 planned or developing facilities potentially qualifying. "Right now, the only requirement to get the benefits is capital investment," says Emily Kraschel, a tax policy analyst at the Searchlight Institute, a public policy think tank. "However, that doesn't guarantee that that money is necessarily creating jobs or creating a local economic boost. You'd be more sure of that with a more traditional factory that requires lots of workers. But with a data center, that assumption goes a little wonky." From the report: During the first Trump administration, a bipartisan group of lawmakers proposed the creation of the opportunity zone program, which offers tax benefits for companies that choose to build projects in certain low-income census tracts. Last year, the One Big Beautiful Bill Act made a number of changes to open up the program in order to attract more investment to rural areas. Kraschel and her colleagues from Searchlight have been researching data center projects that might qualify for these tax benefits, comparing the locations of data center projects in development with rural census tracts eligible for the new program. Wired exclusively reviewed the research compiled by Searchlight and found more than 100 data centers under various stages of development in rural areas that could be eligible.
Searchlight used a very conservative database of under 700 data center projects that are planned or under construction to compile its research; other datasets put the number of data centers in development in the US at closer to 1,500. It's very likely that the number of newly eligible projects is bigger, especially since more data centers are decamping from urban areas. Separate research from Pew found that while just 13 percent of operating data centers are located in rural areas, a majority of planned facilities -- around 67 percent -- are going rural. [...] A project simply existing in a rural opportunity zone doesn't mean the company automatically will get the tax benefits; the company has to create a specialized investment vehicle to kickstart the process. Because the tax break can be considered confidential IRS data, it's next to impossible to know which companies are pursuing the benefits unless they voluntarily disclose.
[...] Nathan Jensen, a government professor at the University of Texas-Austin, says that he would be "very surprised" if some companies were not considering siting in rural opportunity zones as part of their decisionmaking process. "It's essentially free money," he says. There is no requirement for projects getting opportunity zone benefits to create jobs; the assumption is that they will do so, simply by siting in the community itself. This isn't always the case for projects like storage facilities and warehouses, which, Jensen says, have been popular choices for developers working in opportunity zones. Data centers may create a number of jobs in the short term for their construction, but there's an ongoing debate about whether or not they create a lasting new workforce over the longer term.
Searchlight used a very conservative database of under 700 data center projects that are planned or under construction to compile its research; other datasets put the number of data centers in development in the US at closer to 1,500. It's very likely that the number of newly eligible projects is bigger, especially since more data centers are decamping from urban areas. Separate research from Pew found that while just 13 percent of operating data centers are located in rural areas, a majority of planned facilities -- around 67 percent -- are going rural. [...] A project simply existing in a rural opportunity zone doesn't mean the company automatically will get the tax benefits; the company has to create a specialized investment vehicle to kickstart the process. Because the tax break can be considered confidential IRS data, it's next to impossible to know which companies are pursuing the benefits unless they voluntarily disclose.
[...] Nathan Jensen, a government professor at the University of Texas-Austin, says that he would be "very surprised" if some companies were not considering siting in rural opportunity zones as part of their decisionmaking process. "It's essentially free money," he says. There is no requirement for projects getting opportunity zone benefits to create jobs; the assumption is that they will do so, simply by siting in the community itself. This isn't always the case for projects like storage facilities and warehouses, which, Jensen says, have been popular choices for developers working in opportunity zones. Data centers may create a number of jobs in the short term for their construction, but there's an ongoing debate about whether or not they create a lasting new workforce over the longer term.
Re: (Score:2)
But is it a reward if elona musk puts the equivalent of 500 747s in your backyard, gets the tax breaks and all you get is a temporary job building the triple concrete and razor wire fence around the thing?
How much you want to bet.. (Score:2)
This doesn't get any coverage at all on Fox News?
Rural populations mostly vote red (Republican) (Score:3)
Putting them in cities which mostly vote blue is going to be harder for a few of reasons.
1. Land costs more in the city than out in the country.
2. Democratic voters tend to be more concerned about the environment.
3. There are transmission lines which need to get built. This is going to be difficult to get approved in a large city.
Re: (Score:3, Insightful)
Re:Rural populations mostly vote red (Republican) (Score:5, Insightful)
I have watched several videos of local county level Town officials being screamed at by their constituents because they approved the data center. And they just let it wash over them because they know when election time comes it's going to be a choice between them and a Democrat and there is no way in hell those people are going to vote for a fucking Democrat.
Re: (Score:3)
If all the negative publicity accomplishes is getting these small towners better deals and maybe some reasonable restrictions on noise and resource use then it's a pretty big win compared to the status quo of fuck you, I'm eating.
Re: (Score:3)
Minor perks aside, the reality is that the Datacenter gets free money and the rural community gets noise and inconvenience. Keep those pitchforks sharpened, in other words.
Re: (Score:2)
Re: (Score:3)
They will pay enough taxes to cut residents' tax bills by a significant chunk.
Yes that will totally happen LOL.
Re: (Score:3)
Just to tack onto this, the answer or ask here isn't really "Hey farmers, just become Democrats now" it's that they really need to demand more from the Republican party and this point rebuild it from first principles because it has none at the moment. It's still a two party system and a sane, competent Republican party is important to have just as much as it is from Democrats.
Think about how it'd be nice to have two parties that both agree climate change is a real thing, because we all believe in science a
Re: (Score:2)
Folks, the choice is yours but this is your post-Trump future. It won't get better if you just keep going along with it.
You cannot demand more from the Republican party (Score:2)
I do not think it's unfair to call the Republican party a terrorist organization
Re: (Score:2)
The problem conservatism has, and has always had, was that its always been primarily defined by "we oppose the new thing!" sentiments. That might be fine when "the new thing" is actively obnoxious, and neither leftism nor liberalism certainly isn't without some deep flaws, but it doesn't leave itself with a solid set of coherent first principles to build on.
Hence why you get paleoconservatives, who want religious control over life and a heavy government control over culture (aka speech) as well as supportin
Re: (Score:1)
What's really funny is watching the rsilvergun bot masturbating to its Chinese master's photos. But not in a "funny, ha ha" sort of way. More like a "funny, dinner didn't taste as good coming up as it did going down" sort of way.
Re: (Score:2)
if there's two issues I've found where Red and Blue agree. It's No Flock and No Datacenters.
Me personally, I don't have too many problems with Datacenters outside of where they put them and what they do with them.
1) Put them in Brownfields. In the US there's over 400000+ industrial classified brownfields with somewhere around 5-15 million acres depending on who you ask. Most of these brownfields have access to large amounts of electricity and water and since industries already make a lot of noise most commu
Re: (Score:2)
Re:Rural populations mostly vote red (Republican) (Score:5, Interesting)
> 2. Democratic voters tend to be more concerned about the environment.
This is technically true but is counterbalanced by the fact rural areas tend to be extremely NIMBY. Unbelievably so. It's hard to get permission to rebuild a dilapidated strip mall, let alone build a data center.
There's a railroad near where I live that was freight only, but wanted to run passenger trains - completely unsubsidized (beyond a tax free loan, and I've never bought the argument "tax free" means subsidized, but that's for another day) - on the same lines. Virtually nothing changed. No impact on the local community. Two trains an hour tying up railroad crossings for a maximum of 20-30 seconds, a minute an hour.
Every fucking "community" North of the Miami-West Palm Beach-Jupiter metropolis raised objections. This was for an existing railroad, with zero impact beyond long sought after safety improvements and quiet zones!
You think rural areas are going to support building actual buildings?
Pffft.
Indeed, I wonder if it'd be easier, even if as you point out more expensive, to build a data center in a city. Just renovate an existing industrial building and hope nobody sees the planning notices.
Re: (Score:3)
Indeed, I wonder if it'd be easier, even if as you point out more expensive, to build a data center in a city. Just renovate an existing industrial building and hope nobody sees the planning notices.
Just responding to this point as an FYI. Data Centres are so specifically designed that it easier to lay waste to any existing structure that is on the land and start over. The company I work for has thousands of warehouses world-wide and really wanted to utilize what they had. The only practical solution was
USA has a vicious circle (Score:5, Insightful)
This is how the rich get richer: The cost is dumped on the working class. The best example is austerity, which is caused by government over-spending: Often to help rich people. It is a vicious circle.
Tax break = taxpayer paying for water and power (Score:5, Interesting)
Re: (Score:2)
Re: (Score:2)
That statement is only true if the total economic outcome is exactly the same for the taxpayers, something that is rarely true.