Forgot your password?
typodupeerror
United States

Rural Data Centers Are in for a Big Federal Tax Break (wired.com) 63

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.

This discussion has been archived. No new comments can be posted.

Rural Data Centers Are in for a Big Federal Tax Break

Comments Filter:
  • by outsider007 ( 115534 ) on Monday October 05, 2026 @07:35PM (#66364620)

    This doesn't get any coverage at all on Fox News?

  • by hwstar ( 35834 ) on Monday October 05, 2026 @07:42PM (#66364632)

    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.

    • by rsilvergun ( 571051 ) on Monday October 05, 2026 @08:10PM (#66364672)
      4. Widespread voter suppression and propaganda in red districts undermines democracy to the point where they can blow off their voters even more so than they can in blue districts.
      • by rsilvergun ( 571051 ) on Monday October 05, 2026 @08:12PM (#66364674)
        I should add, it is kind of funny in a morbid way watching right wingers who have been voting to undermine democracy for 50 years in order to stick it to the libs finding out that you can't undermine democracy just for the libs.

        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.
        • by jacks smirking reven ( 909048 ) on Monday October 05, 2026 @11:08PM (#66364772)

          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 after all and maybe just have disagreements about the best way to tackle it but find compromise solutions. Instead we still have to talk about if it's a hoax.

          Make no question though, the short term, if you're a Republican or Independent who doesn't want incompetent fascism to take over your party forever, unless you just want the last 2 years but worse every day, you have to vote blue down the line for like the next 10 years or none of us will like the choices we're left with, on either side. You think when Trump kicks it we're just back to Bushism?

          • They are the party of the billionaire and the fascist. That's what you get with the Republican party. There is nothing to save there. At a certain point an institution just becomes too corrupt to be saved. That point was around 1995 when newt Gingrich and his cronies took over the party completely and started actively hurting the country so that they could blame the damage on the Democrats and leverage that into election wins.

            I do not think it's unfair to call the Republican party a terrorist organization
            • You big dummy. Republicans can be won over if democrats pitched on being for poor folk instead of being for trans athletes and similar fringe bullshit.

              I honestly hope they learn their lesson and abandon their fringe constituents but we both know they won't and therefore we're all fucked.

              • The only people talking about "trans athletes" are Republicans, and the only people who give a god damn are Republicans.

                This is why they pander to bigots like you - it's an easy vote to get, so they can do a string of things that harms you, and nothing about your bigoted bullshit because they want the issue so they can keep bilking hayseeds to vote for them.

                • You just proved my point by calling me a bigot. Democrats need to de-prioritize trans athletes (0.001% percent of their base). This has nothing to do with bigotry and everything to do with math, but you lose your shit when someone even suggests it and that, my friend, is why Democrats will never win another election.

                  • by spitzak ( 4019 )

                    Democrats are not "prioritizing trans athletes". It is Republicans who talk about them all the time, incessently. You are example #1.

                    • Sigh. My point is that Democrats can't win because when they pick a side on trans athletes it will either cost them the primary or cost them the general. And no I have never voted for a Republican.

                  • You are parroting the bigot bullshit from Republicans that are selling you a bullshit issue. This makes you at least a passive bigot hayseed easily bilked by sociopaths, if not actively a bigot. QED.

                    Nobody cares about this except bigots, culture war hayseeds easily bilked by Republican politicians, and actual trans athletes. So which are you?

                    • I care about it because it makes people like you insane. Here you are trying to convince me you don't care about an issue by calling me a bigot and a hayseed. Can't you see that you're not thinking clearly?

          • 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:2, Troll)

            Republicans are a cult in need of de-programming. Decades of Fox News fear mongering has altered their brains. Being scared of everything is their religion. They don't have a platform. It boils down to whatever liberals do is harmful to your family so vote us and stay safe!

        • 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

        • by arglebargle_xiv ( 2212710 ) on Tuesday October 06, 2026 @02:38AM (#66364852)
          Like way too many things these days "owning the libs" isn't a one-off purchase, it's a lifetime non-cancellable subscription, and your children and children's children will be paying for it as well.
    • by karmawarrior ( 311177 ) on Monday October 05, 2026 @08:15PM (#66364676) Journal

      > 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.

      • by lazarus ( 2879 )

        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

      • completely unsubsidized

        That's the issue here. Something unsubsidized without government involvement is generally considered at the whim of the people. Their objections can kill a project. On the flip side something subsidized is directly the result of enacting government policy. People don't come into it unless it's an election year, and even then in many "safe seats" people don't come into it at all. What they gonna do? Vote democrat? LOL

      • Many Rust Belt cities need investment. They've vast disused smokestack industrial areas with power, water and sewer. They have millions of obsolete structures begging for the wrecking ball.

        Data center operators could be incentivized to demolish toxic eyesores and replace them with clean data centers. The low population impact from data centers won't overcrowd Rust Belt areas while contributing to their development.

        Development deals could be generous while requiring demolition of areas not yet planned for de

  • by NotEmmanuelGoldstein ( 6423622 ) on Monday October 05, 2026 @08:52PM (#66364706)
    The goal is helping rich people create something that they can also keep (with sports facilities being the best example), using taxpayer's money.

    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.

    • Austerity has never worked because of velocity of money, you are literally preventing the creation of wealth when employing it. It's the same when applied to Greece by the EU. They've been happy to suck wealth out of Greece, require that it meet standards they set while some of their own members don't meet their own standards (including Germany which has been the strongest voice for austerity) while also doing nothing to help them meet targets, like increasing imports. Come back to the USA and compare to bl

  • by Ajay Anand ( 2838487 ) on Monday October 05, 2026 @10:34PM (#66364752)
    Tax break to a private data center is exactly same as taxpayer paying for its water and power expansions. Change my mind.
    • Depends entirely on the numbers and whether those resources are scarce in that place. If the datacenter ends up funding the expansions, and then the community make a profit every month forerever on supplying those utilities, it's a win.
    • That statement is only true if the total economic outcome is exactly the same for the taxpayers, something that is rarely true.

  • by 0x537461746943 ( 781157 ) on Tuesday October 06, 2026 @09:56AM (#66365194)

    I think we need small, medium and big business to be on the same playing field with taxes as we need them all to prosper. find a tax percentage that works for all and stick to it and adjust it for all instead of finding ways to give big businesses ways around them. Simplify the tax code.

God made the integers; all else is the work of Man. -- Kronecker

Working...