Hyperscalers Hesitant Over Rural Tax Windfall

Starting January 1, 2027, data center projects located in rural tracts may be eligible for significant corporate tax benefits under the One Big Beautiful Bill Act, as Wired first reported. Jason Smith, chair of the Ways and Means Committee, previously stated the program makes the economic case for building in designated rural opportunity zones "far more compelling" by lowering barriers for capital-intensive hyperscale projects.

Despite the incentive, major tech firms are avoiding the program. According to reporting from Wired, Microsoft, Meta, and Amazon all denied using the opportunity zone program. Amazon spokesperson Julia Lawless stated the company does not actively seek land in these zones and that site selection is based on criteria like talent and land availability rather than tax benefits. Rima Alaily, Microsoft's general counsel of infrastructure legal affairs, confirmed the company does not use the program for data center construction or purchase. Google did not respond to Wired's inquiry.

Research from the Searchlight Institute, reviewed by Wired, identified over 100 data centers currently in development that could qualify for these benefits. This trend aligns with Pew research showing that while only 13 percent of operating data centers are rural, approximately 67 percent of planned facilities are moving to rural areas.

The program faces growing political scrutiny. Senator Josh Hawley recently introduced legislation to eliminate opportunity zone funding for data centers to prevent Big Tech from receiving tax breaks to build on farmland. Additionally, Emily Kraschel, a tax policy analyst at Searchlight, noted that because the benefit only requires capital investment, it does not guarantee local job creation or economic boosts.