05/04/2026
FINDINGS ABOUT THE DATA CENTERS
According to the National Conference of State Legislature,
"Data centers—massive facilities filled with computers—are key components of the digital economy. At least 4,000 data centers are spread across the country, with the largest concentration in Virginia, Texas and California. With demand for data centers projected to grow 9% annually through 2030 and worldwide spending forecast to surpass $7 trillion, states are increasingly competing to attract these capital-intensive projects.
Currently, 38 states offer dedicated tax incentives for data centers, ranging from sales and use tax exemptions to property tax abatements. Proponents believe data centers will promote local economic growth and increase local tax revenues. At the same time, as utility bills across the country reach record highs and local opposition has increasingly slowed the growth of new data centers, policymakers are re-evaluating the impact of these energy-intensive projects."
North Carolina is offering, under section "State Tax Incentives for Data Centers"
General Sales Tax Incentive: Yes: Sales and use tax exemption for software, machinery, and support equipment
Sales Tax Incentive Extends to Electricity? Yes: “electricity for use at a qualifying data center…" is exempt
Property Tax Abatement: No
Notes: N.C. Gen. Stat. § 105-164.13(55a):
Taken directly from https://www.ncsl.org/fiscal/subsidizing-servers-how-states-are-competing-to-attract-data-centers
N.C. Gen. Stat. § 105-164.13(55a):
"(55a) Sales of electricity for use at a qualifying datacenter and datacenter support equipment to be located and used at the qualifying datacenter. As used in this subdivision, "datacenter support equipment" is property that is capitalized for tax purposes under the Code and is used for one of the following purposes:
a. The provision of a service or function included in the business of an owner, user, or tenant of the datacenter.
b. The generation, transformation, transmission, distribution, or management of electricity, including exterior substations, generators, transformers, unit substations, uninterruptible power supply systems, batteries, power distribution units, remote power panels, and other capital equipment used for these purposes.
c. HVAC and mechanical systems, including chillers, cooling towers, air handlers, pumps, and other capital equipment used for these purposes.
d. Hardware and software for distributed and mainframe computers and servers, data storage devices, network connectivity equipment, and peripheral components and equipment.
e. To provide related computer engineering or computer science research.
If the level of investment required by G.S. 105-164.3(201) is not timely made, the exemption provided under this subdivision is forfeited. If the level of investment required by G.S. 105-164.3(201) is timely made but any specific datacenter support equipment is not located and used at the qualifying datacenter, the exemption provided for such datacenter support equipment under this subdivision is forfeited. If the level of investment required by G.S. 105-164.3(201) is timely made but any portion of electricity is not used at the qualifying datacenter, the exemption provided for such electricity under this subdivision is forfeited. A taxpayer that forfeits an exemption under this subdivision is liable for all past taxes avoided as a result of the forfeited exemption, computed from the date the taxes would have been due if the exemption had not been allowed, plus interest at the rate established under G.S. 105-241.21. If the forfeiture is triggered due to the lack of a timely investment required by G.S. 105-164.3(201), interest is computed from the date the taxes would have been due if the exemption had not been allowed. For all other forfeitures, interest is computed from the time as of which the datacenter support equipment or electricity was put to a disqualifying use. The past taxes and interest are due 30 days after the date the exemption is forfeited. A taxpayer that fails to pay the past taxes and interest by the due date is subject to the provisions of G.S. 105-236."
Taken directly from https://www.ncleg.net/enactedlegislation/statutes/html/bysection/chapter_105/gs_105-164.13.html
"As data centers continue to generate attention, lawmakers in 14 states are considering banning their development. The proposed moratoriums all target new facilities and are often paired with requirements to study the impacts of data centers.
Proponents argue that moratoriums on data centers will allow additional time to explore their effects on local communities and improve power grid resiliency. Opponents argue that the moratoriums will hamper AI development and hurt local economies."
Taken directly from https://www.ncsl.org/fiscal/which-states-are-banning-data-centers
NCSL explores the 50-state landscape of data center tax incentives, offering the clearest picture yet of the economics of data centers.
