Data centers planned for Arkansas poised to get millions of dollars in property tax breaks

Data centers being developed in Arkansas are poised to receive millions of dollars in property tax breaks and utility fee reductions, significantly diminishing the potential tax revenue for local governments and school districts. These projects, including Google's planned facilities in Little Rock and West Memphis and AVAIO Digital Partners' data center in Pulaski County near Wrightsville, are utilizing property tax abatements allowed under Arkansas law, which can reduce taxes by up to 65% for 30 years.

For instance, Google's Little Rock data center, valued at an estimated $1 billion, is projected to generate over $5 million annually in property tax revenue and fees with abatements. However, without these incentives, it would yield over $12.8 million in property taxes alone. Additionally, the Little Rock Board of Directors approved measures in April 2025 to slash local utility franchise fees for high-volume users, effectively reducing electricity fees for Google from 5.2% to 0.25% and eliminating water and wastewater fees entirely.

Jack Thomas, senior vice president of economic development for the Little Rock Regional Chamber of Commerce, defends these incentives as crucial for attracting global companies and expanding the tax base, noting Google's project will transform property that previously paid minimal taxes. He also indicated the Google project has the potential to expand from one building to five, significantly increasing future tax contributions.

However, Kasia Tarczynska, a researcher with Good Jobs First, a nonprofit tracking corporate subsidies, critiques these tax breaks as a "missed opportunity" for public services. She argues that tech companies building data centers, driven by market demand and ample capital, don't require public financial support and prioritize factors like power costs and regulatory hurdles over subsidies.