Lombardo sets new conditions for Nevada data center tax breaks
Nevada Gov. Joe Lombardo signed an executive order imposing new conditions on data center tax breaks, requiring developers to sign a "Nevada Community Support Commitment." This agreement will address concerns like water use and grid reliability, and mandate full payment of the Local School Support Tax. The move aims to ensure data centers provide greater benefits to the community amidst growing industry concern.
Nevada Governor Joe Lombardo has issued an executive order imposing new conditions on tax breaks for data center developers in the state. The order mandates that the Governor's Office of Economic Development create a "Nevada Community Support Commitment" agreement by November 6, which data center applicants must sign before their tax abatement applications can proceed. This commitment will require developers to fully pay the Local School Support Tax and address critical areas such as water usage, grid reliability for ratepayers, site selection, workforce development, community benefits, transparency, and speed to power.
The Governor, a Republican, stated that the order sets clear expectations for companies wishing to build in Nevada, aiming to balance economic growth, job creation, and long-term benefits for Nevadans with responsible investment. This action follows local governments' considerations of data center moratoriums and a call from the Clark County Education Association for the Nevada Legislature to re-evaluate data center tax incentives. Democratic Attorney General Aaron Ford, Lombardo's past gubernatorial opponent, has advocated for a complete pause on tax breaks and proposed a plan to address environmental impacts.
Currently, the state's economic development office can reduce sales tax from 6.85% to 2% and property taxes by 75% for qualifying data centers. The existing requirements for these abatements include employing Nevada residents and significant capital spending. The new order adds the local schools tax payment and the community support pledge. Additionally, tax abatements will be denied to data centers owned by countries classified as foreign adversaries. The Data Center Coalition, an industry advocacy group, expressed concerns about new hurdles but supported the governor's commitment to job creation, natural resource protection, and public education.