Sales Tax Incentives for Data Centers

This article was originally published in the Journal of State Taxation.

With artificial intelligence, cryptocurrencies, and the digitization of the physical world accelerating at an unprecedented pace, the demand for data centers and supporting infrastructure has also reached new heights. In a competitive bid to attract technology investment, states are ramping up efforts to offer data center incentives and tax exemptions. 

This article examines sales tax incentives for data centers, highlighting recent developments in Arkansas, Kentucky, Louisiana, and New Jersey. It provides practical guidance on taking full advantage of sales tax incentives benefits, maintaining compliance with their requirements, and understanding the nuanced provisions specific to each program.