New research finds ND keeps data center tax breaks hidden
North Dakota is among states failing to disclose the amount of money data centers save from tax breaks, prompting calls for greater transparency from researchers. This lack of disclosure is criticized for undermining public budgets and violating accounting principles. Lawmakers in North Dakota recently saw a bill to increase regulatory oversight of data centers fail in committee.
North Dakota is identified as one of at least 14 states that do not disclose the value of tax breaks granted to data centers, a practice critics argue undermines public budgets and lacks transparency. Kasia Tarczynska, a senior research analyst for Good Jobs First, emphasized that this lack of disclosure by states, particularly in the Midwest, often violates Generally Accepted Accounting Principles set by the federal Governmental Accounting Standards Board. She pointed out that while data centers are promoted for economic development, the tax exemptions, especially on equipment like servers, result in significant revenue losses that could otherwise fund public services.
With 23 data centers operating in the state, North Dakota lawmakers are increasingly looking to regulate the industry's rapid growth. Although a bill to bring data centers under the regulatory framework of the North Dakota Public Service Commission was introduced, it ultimately failed in committee this month. The Commission currently has limited authority over data centers despite regulating the power infrastructure that serves them. Critics contend hyperscale data centers are intensive users of electricity, water, and land, further complicating their economic impact.