Federal tax incentives boost rural data center development

A new federal tax incentive, set to take effect next year, could significantly benefit rural data center projects under the One Big Beautiful Bill Act. The legislation expands the opportunity zone program, offering tax advantages to companies building in designated rural areas. Jason Smith, chair of the Ways and Means Committee, highlighted that the policy could lower barriers for large-scale projects, particularly hyperscale data centers. However, experts caution that the benefits may not always translate to local job creation, as Emily Kraschel of the Searchlight Institute noted. The program has faced criticism, with Senator Josh Hawley proposing legislation to eliminate funding for data centers in opportunity zones. Despite the incentives, major tech companies like Microsoft, Amazon, and Meta have denied using the program for their projects. Meanwhile, research suggests over 100 data centers are under development in rural areas, with some companies potentially benefiting from the tax breaks.