Arizona Gov. Katie Hobbs approved a three-year pause on tax breaks for data centers amid concerns these developments are straining state water and energy supplies. But hundreds of developments could still benefit for years to come.
Lawmakers approved the Computer Data Center Program in 2013 in an effort to attract data center development to the state. The program offered vendor, state, county and local sales tax exemptions on computer equipment purchases to applicable developers through 2033.
Tax breaks were available for up to 10 years for projects building on new sites and up to 20 years for redevelopment projects, which are viewed as more sustainable.
The Arizona Commerce Authority, which oversees the program, says 83 data center developments have benefitted since it was introduced.
In the two weeks leading up to the governor’s pause on tax breaks, the Commerce Authority says it received 113 new applications. That’s just 10 applications shy of the total amount of requests it has received since 2013.
Because they came in ahead of the July 1 moratorium, those proposals could still be eligible.
The Commerce Authority says the applications mostly came from facilities that are already approved or are in the process of expanding. But some may still represent new data center projects.
After receiving an application, the Commerce Authority has 60 days to decide if a project qualifies. Qualifications are based upon how much the project has invested or plans to invest in the community. Investment benchmarks vary depending on when and where the facility is built.
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