Lombardo curtails Nevada data center tax break program in executive order
Nevada Governor Joe Lombardo has issued an executive order that modifies data center tax incentive programs. The order prohibits tax relief on school-supporting taxes and requires companies to commit to covering their own power costs. This move is part of broader efforts to manage the economic and environmental impacts of the state's growing data center industry.
Nevada Governor Joe Lombardo signed an executive order that significantly alters the state's tax break program for data centers. The order prohibits data centers from receiving tax relief on a tax that supports local schools and mandates that companies receiving incentives commit to covering their own power costs.
This executive action, which goes into effect immediately and comes less than two months before an election, also directs state officials to propose methods for limiting delays in meeting the exponential growth of data center power needs. Governor Lombardo stated the order sets clear expectations while fostering responsible investment and economic growth. The move follows a strategy memo outlining how "unqualified support for building more AI data centers is a losing position" and is a response to the increasingly controversial industry.
Environmental advocacy groups are pushing for state law to codify existing efforts requiring all data centers to cover grid costs, a commitment Lombardo has reaffirmed. The order specifically targets new state tax break applications, requiring the Governor's Office of Economic Development (GOED) to only approve applications if data centers pledge to pay all local school support and sales and use taxes, and meet specific water standards, cover all electricity costs, and not impede public electricity access during grid emergencies.
Political figures have reacted to the order, with Attorney General Aaron Ford, a gubernatorial candidate, criticizing it as a "last-ditch excuse" and pledging to pause new data center tax breaks if elected. The Data Center Coalition, an industry trade group, expressed concerns that some policies in the order create additional hurdles for development in Nevada.