Nevada officials propose reforms to data center tax incentives

Legislators and local officials in Nevada are debating significant changes to the state’s data center tax incentive program. In North Las Vegas, State Senator Dina Neal recently pushed an interim revenue committee vote to send a 2027 bill to the legislature that would end data center tax breaks and halt new construction and expansions statewide. Neal argued that companies can afford to pay full taxes and that the state must slow down the strain on water and power resources.

In Storey County, a major hub for the industry that has received three-quarters of the state’s $461 million in expected tax breaks, officials have submitted a proposal to the Nevada Legislature to reform the program. The proposal seeks to shorten the duration of tax incentives, impose stricter spending requirements, prohibit breaks for projects on federal land, and require more public disclosure regarding water and energy use. The county also suggests giving local governments more power to reject tax breaks.

The debate comes as the rise of artificial intelligence has accelerated data center growth, leading to increased concerns regarding energy and water consumption. While some newer facilities utilize more efficient technology, many local governments across the state are reconsidering approvals or seeking new regulations for the industry.