SUMMARYRural data centers may qualify for expanded federal Opportunity Zone tax benefits starting in 2027 under changes made by the One Big Beautiful Bill Act. Searchlight Institute identified more than 100 planned or developing rural facilities that could be eligible, while separate research from Pew found that most planned data centers in the U.S. are heading to rural areas. The tax break requires investment in a qualifying vehicle, but it does not require job creation.
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.