WASHINGTON — Today, U.S. Senator Josh Hawley (R-Mo.) introduced the No Tax Breaks for Data Centers Act to prevent Big Tech companies from taking advantage of tax incentives previously authorized by Congress to encourage investment in low-income communities.
The Opportunity Zone program, originally enacted by Congress in 2017, provides eligible taxpayers substantial tax breaks for qualifying investments in low-income communities. Unfortunately, some companies have hijacked the program to purchase and construct data centers. One report found that between 14% and 17% of data centers in the United States have been built, or will be built, in qualifying opportunity zones—permitting Big Tech companies to qualify for tax incentives that were not intended for them.
This legislation follows Senator Hawley’s bipartisan GRID Act, which prevents data centers from driving up energy costs and ensures that American consumers are not carrying the burden of the increased electricity usage.
“Big Tech companies are getting major tax breaks they don’t need to build data centers communities do not want. We must close the loophole immediately,” said Senator Hawley. “I’m introducing the No Tax Breaks for Data Centers Act to ensure Big Tech companies don’t get tax breaks to build data centers on farmland.”
The No Tax Breaks for Data Centers Act will:
- Exclude data centers from the definitions of qualifying opportunity zone businesses and qualifying opportunity zone property, thus disallowing taxpayers from using the beneficial tax treatment of the Opportunity Zone program to invest in the purchase or construction of a data center.
- Preserve the Opportunity Zone tax incentive program for all other eligible opportunity zone businesses and property.
Read the full bill text here.