North Carolina Among 14 States Hiding Data Center Tax Break Losses
A new study reveals North Carolina and 13 other states aren’t disclosing how much tax revenue they lose to data center incentives, while some states report billion-dollar losses.
RALEIGH, NORTH CAROLINA — North Carolina is among 14 states that do not disclose how much tax revenue they lose to data center incentives, according to a new study released as public scrutiny of these facilities intensifies.
The report from Good Jobs First, a watchdog group focused on economic development incentives, found that Alabama, Arkansas, Idaho, Iowa, Indiana, Louisiana, Maryland, Missouri, Mississippi, North Carolina, North Dakota, Oklahoma, South Carolina, and Utah all failed to report data center incentives. These incentives generally include sales, use, and property tax breaks.
The lack of transparency comes as three states — Georgia, Virginia, and Texas — report losing $1 billion or more per year to data center incentives, highlighting the significant financial impact of these programs.
Billions in Lost Revenue
Currently, 38 states offer dedicated tax incentives for data centers, according to the National Conference of State Legislatures. States have competed aggressively for these facilities, drawn by their substantial investment in construction and equipment.
However, Good Jobs First argues that most states are violating financial reporting standards by failing to disclose these incentives. The organization said states are not complying with the Governmental Accounting Standards Board, a private organization that sets financial reporting standards for state and local governments.
“No form of state spending is more out of control today than data center tax abatements,” said Greg LeRoy, executive director of Good Jobs First and primary author of the study. “Hyperscale data centers are not only extractive of electricity, water, and land; they are also undermining public budgets.”
Growing Public Scrutiny
Data centers, sprawling campuses of computer servers that store and transmit the data behind apps and websites, are facing increasing public attention. The facilities require enormous amounts of electricity and water to operate and cool their equipment.
The Good Jobs First study comes at a time when communities across the country are grappling with the trade-offs of hosting these energy-intensive facilities. While data centers bring construction jobs and infrastructure investment, they also strain local power grids and water supplies.
The report calls for greater transparency in how states account for the tax revenue they forgo to attract data center development. Without proper disclosure, taxpayers and policymakers cannot fully assess whether these incentive programs deliver adequate returns on public investment.
