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Research finds over 100 rural US data-center projects could qualify for tax breaks

Searchlight Institute compared developing US data-center locations with rural areas eligible for an expanded federal tax program. More than 100 projects could qualify, but potential eligibility does not show that developers have claimed the benefit. A specialized investment vehicle is required. Microsoft, Meta and Amazon denied using the program, while Google did not respond. Job creation is not a requirement.

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Open structural bays, cooling units and cranes surround a data center under construction beside green farmland.

Researchers compare project sites with eligible areas

Searchlight Institute research identifies more than 100 developing rural US data-center projects that could qualify for expanded federal tax benefits. Researchers compared project locations with eligible rural census tracts. These projects may be eligible. That does not establish that their developers have received a tax break or that the planned facilities have been completed and begun operating.[1], [2]

WIRED exclusively reviewed the research, which used a conservative database of fewer than 700 planned or under-construction projects. Other datasets put US data centers in development closer to 1,500. These are different project databases, not counts of operating centers. Separate Pew research found that 13% of operating facilities are rural, compared with roughly 67% of planned ones. Searchlight's analysis concerns projects at different stages of development and the census tracts where they are located. It does not establish that every planned project will be built or that every qualifying developer will enter the tax program.[1]

An eligible location does not confer the benefit

The opportunity zone program began during the first Trump administration to encourage investment in designated low-income census tracts. The One Big Beautiful Bill Act expanded it toward rural investment last year, with new eligibility rules taking effect next year. A company must establish a specialized investment vehicle to obtain the benefit; locating a data center in a qualifying tract alone is insufficient. Participation may be confidential IRS information, so individual claims cannot always be established from public records. Companies can disclose their own participation voluntarily. The government's $40.9 billion estimate for the next decade covers the overall rural expansion, not data centers alone.[1]

Companies deny participation; jobs are not required

Microsoft, Meta and Amazon denied using the program. Microsoft's infrastructure legal-affairs general counsel Rima Alaily said it does not use opportunity zones to buy or build data centers. Amazon spokesperson Julia Lawless said the company has not claimed the benefit, does not actively seek eligible land and does not plan to add the program to site-selection criteria. Google did not respond. Searchlight tax-policy analyst Emily Kraschel said the program requires capital investment but does not require job creation. Temporary construction work and sustained operating employment are separate issues in the discussion of these developing projects.[1]

References

  1. News sourceWIREDResearch identifies over 100 rural data-center projects potentially eligible for tax benefits↩1↩2↩3↩4
  2. News sourceSuperpower DailySearchlight Identifies 100-Plus Rural Data Centers That Could Qualify for Federal Tax Breaks↩
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