Nevada is reviewing its data center tax breaks — but counties are out of the loop
Nevada state officials are reviewing the state's data center tax break program, but many county governments report being excluded from these critical discussions. The Attorney General has proposed pausing the program for audits, reflecting growing concerns over the tax breaks' economic efficacy and data centers' water and energy usage. This review occurs as several counties have independently enacted moratoriums on data center construction.
Nevada state officials are reviewing the state's contentious data center tax break program, signaling potential changes to the incentives that have fueled significant data center development. Governor Joe Lombardo's administration initiated discussions with regional economic development groups, utility providers, and industry representatives. However, a Nevada Independent investigation revealed that 12 of the state's 17 counties have not been consulted, despite their critical role in the data center approval process and the financial burden these tax breaks place on local government coffers.
The program, enacted in 2015, has granted an estimated $461 million in property and sales tax abatements to 14 data centers, generating concerns about its economic benefits and the impact of data centers on local water and energy resources. Nevada Attorney General Aaron Ford, a sponsor of the original 2015 bill, has since proposed pausing the tax break program for audits of all recipient companies. Meanwhile, several counties have independently enacted their own moratoriums or bans on data center construction, further highlighting the disconnect between state-level policy discussions and local government actions.
County officials, including Elko County Commissioner Rex Steninger, expressed frustration over their exclusion, noting that local governments have missed out on over $537 million in sales and use tax revenues due to the incentives in three counties (Clark, Washoe, and Storey) where tax breaks were granted. Amy Hyne-Sutherland, CEO of the Nevada Association of Counties, emphasized the need for counties to be included in these critical discussions due to their unique needs and jurisdictional oversight over zoning and permitting. While some regional development agencies like Northern NV Now advocate for balancing growth with infrastructure and resource stewardship, others, such as Sheldon Mudd from northeastern Nevada, have called for the complete dissolution of the data center abatement program.