Big Tax Breaks Coming for Rural Data Centers

Beginning January 1, a new federal tax program will make rural data center projects eligible for corporate tax benefits under an expanded opportunity zone framework created by the One Big Beautiful Bill Act. Ways and Means Committee chair Jason Smith called the change a major shift, saying the economic case for building in designated rural zones becomes 'far more compelling.' WIRED exclusively reviewed research from the Searchlight Institute, a public policy think tank, which identified over 100 data centers in various development stages that could qualify—based on a conservative dataset of under 700 planned or under-construction U.S. projects. Other datasets count roughly 1,500. Pew research adds context: while only 13% of operating data centers are in rural areas, about 67% of planned facilities are heading there. The opportunity zone program was originally a bipartisan Trump-era initiative targeting low-income census tracts. The new rules expand eligibility to rural land broadly. But tax analyst Emily Kraschel of Searchlight flags a real problem: 'The only requirement to get the benefits is capital investment,' she says. Unlike a factory, a data center doesn't need many workers, so local economic gains aren't guaranteed. Some hyperscalers, notably, appear uninterested in the free money.