Lombardo doubles down on data centers, offers trimmed tax breaks, ‘commitments’ to wary public
Nevada Governor Joe Lombardo signed an executive order to establish data center development standards, reducing sales and use tax abatements and requiring commitments for data centers to cover their own water and power costs. This action is part of a broader political debate in the state regarding data center tax breaks. Communities like Boulder City and Nye County have also taken local actions against data center development.
Nevada Governor Joe Lombardo has issued an executive order aimed at balancing the state's desire for AI data center development with public concerns over tax breaks and utility costs. The order reduces the sales and use tax abatements available to new data centers but does not eliminate them entirely, a move some critics had called for. It also mandates that data centers seeking these abatements sign a "community support commitment" to ensure they bear the full cost of regular and emergency water and power, rather than shifting costs to ratepayers.
This executive action comes amidst significant political debate and public pushback against data centers in Nevada. Attorney General Aaron Ford, a Democrat, has criticized Lombardo's stance and promised to pause data center tax abatements if elected. The debate also highlights the bipartisan origin of the 2015 legislation that established the initial tax breaks, with figures like Ford and State Senator Dina Neal noting the different context of those discussions a decade ago. Local communities have also shown strong opposition, with Boulder City actively fighting a proposed data center and Nye County having outright banned their development.
The Data Center Coalition, an industry group representing major tech companies, expressed gratitude for the Governor's leadership, indicating ongoing engagement with stakeholders. The executive order's provisions, which include exempting the local schools support tax from abatements, would increase the effective sales tax rate for new data centers to 4.6% while existing facilities retain their current tax breaks. The executive order is set to define specific standards for these community commitments by November 6.