Nevada is reviewing its data center tax breaks — but counties are out of the loop
Nevada is reviewing its data center tax break program, but state discussions have largely excluded county governments despite their critical role in project approvals and the financial burden of the incentives. This exclusion is raising concerns among local officials, especially as growing opposition targets data centers' high water and energy use. The state is exploring potential changes to the program, while some counties have already enacted local construction pauses or bans.
The administration of Nevada Governor Joe Lombardo (R) initiated a review of the state's data center tax break program, signaling potential changes to the contentious incentives. However, an investigation by The Nevada Independent revealed that state discussions have primarily involved regional economic development groups, utility providers, and industry representatives, largely excluding county governments. County officials express concern over this omission, as they bear the financial brunt of the tax breaks and hold ultimate decision-making authority over data center construction within their jurisdictions.
Elko County Commissioner Rex Steninger, among others, noted the lack of direct engagement from the Governor's Office of Economic Development (GOED) with counties. An Indy analysis indicates that local governments in Clark, Washoe, and Storey counties have forfeited over $537 million in sales and use tax revenues due to these incentives over the last eight fiscal years. The program, established in 2015, offers a 75 percent abatement on personal property tax and a reduced 2 percent sales and use tax rate, and has been criticized for its impact on local budgets and the high water and energy consumption associated with data centers.
Nevada Attorney General Aaron Ford (D) has proposed a policy platform advocating for a pause in the tax break program, contingent on audits of all recipient companies. While Governor Lombardo remains supportive of data centers, his office referred to the ongoing GOED review. Despite being sidelined in the state-level tax incentive discussions, several counties have independently exercised their authority by enacting moratoriums or outright bans on data center construction, highlighting local control over zoning and permitting. The Nevada Association of Counties has called for greater inclusion of counties in these discussions to address their unique needs and ensure cooperative community service.