Storey County is a hub for Nevada data centers. It wants to rein in state tax breaks.
Storey County, a major data center hub in Nevada, has submitted a comprehensive proposal to the Nevada Legislature aiming to significantly reform the state's data center tax abatement program. The proposal seeks to shorten tax incentive durations, increase spending and job creation requirements, and mandate more public disclosure on water and energy usage. This comes amid growing statewide concerns over data centers' resource consumption and tax breaks, with other officials also proposing tighter regulations or moratoriums.
Storey County, a key hub for Nevada's data center industry, has presented a significant proposal to the Nevada Legislature to overhaul the state's data center tax break program. The county, which has benefited heavily from the program with three-quarters of the state's $461 million in tax breaks going to its developments, now seeks to address growing concerns about the industry's resource consumption and the effectiveness of current incentives.
The proposal aims to reduce the length of tax abatements from 10 or 20 years to five or 10 years, while also doubling spending commitments and slightly increasing permanent job creation requirements for companies to maintain these breaks. It also mandates more public disclosure on data centers' projected and actual electricity and water usage, as well as lost local government tax revenue due to the incentives. Additionally, local governments in Clark and Washoe counties would gain the power to reject tax breaks, a decision the Governor's Office of Economic Development could not override.
This initiative by Storey County reflects a broader shift in sentiment, as data centers have become "increasingly unpopular" in Nevada due to their significant energy and water demands, especially with the rise of AI. Other state officials have also put forth proposals to rein in the industry; Senator Dina Neal (D-North Las Vegas) has suggested ending the tax program entirely and implementing a statewide moratorium on new data center development, a bill that an interim legislative committee has approved for the next session. Attorney General Aaron Ford (D) has also advocated for pausing new tax break approvals pending audits of existing recipients. The Storey County proposal additionally seeks to prohibit tax breaks for data centers on federal land, a topic that gained attention following a Trump administration approval for a data center on federal land.