{"id":2971,"date":"2026-07-08T19:37:00","date_gmt":"2026-07-08T19:37:00","guid":{"rendered":"https:\/\/arizonamovinginsider.com\/?p=2971"},"modified":"2026-07-08T19:37:00","modified_gmt":"2026-07-08T19:37:00","slug":"why-arizona-has-frozen-state-tax-breaks-for-data-centers-for-three-years","status":"publish","type":"post","link":"https:\/\/arizonamovinginsider.com\/?p=2971","title":{"rendered":"Why Arizona has frozen state tax breaks for data centers for three years"},"content":{"rendered":"
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PHOENIX \u2014 A three-year freeze on state tax incentives for data centers gives Arizona time to chart a new strategy, Gov. Katie Hobbs said Tuesday.<\/p>\n

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The moratorium is included in the new state budget, which took effect July 1.<\/p>\n

\u201cNobody’s talking about a moratorium on data centers themselves,\u201d Hobbs said. \u201cThere are places where they make sense, where they provide economic opportunity and where they’re not sucking the groundwater and overtaxing the utilities.\u201d<\/p>\n

Hobbs said the state can now examine its policies and work with local communities on new ones.<\/p>\n

\u201cI don’t have all the answers right now, but I think that’s what this pause gives us a chance to do,\u201d she said.<\/p>\n

The moratorium affects new applications for the tax exemption, including renewals. Hobbs\u2019 office estimates the change will save about $57 million \u2013 money Democratic lawmakers say can be better spent on priorities such as childcare assistance and rural hospitals.<\/p>\n

\u201cThis is about the people of Arizona, and certainly, these profitable megacorporations do not deserve or need a data center tax giveaway \u2013 a sales tax exemption that the rest of us pay,\u201d Senate Minority Leader Priya Sundareshan said.<\/p>\n

Hobbs and Democratic lawmakers had called for the incentives to be repealed. The moratorium was a compromise in the budget deal, Hobbs.<\/p>\n

State Rep. David Livingston, who chairs the House Appropriations panel, told ABC15 last month he didn\u2019t think the freeze was a significant policy change.<\/p>\n

The Legislature passed the incentives in 2013. Hobbs, who was a state senator at the time, voted for it but says it\u2019s now time for a change.<\/p>\n

\u201cIt was the right move at the right time, and it is clear that it has paid off,\u201d she said. \u201cToday, 13 years later, Arizona ranks in the top 10 for data centers nationwide, with nearly 98 facilities currently operating and 86 planned or under construction.\u201d<\/p>\n

Read more Trump says he is \u2018number one\u2019 on Iran kill list as countries trade strikes<\/a><\/p>\n

\u2018Let them pay the full amount\u2019<\/h2>\n

April Butler, who lives near the site of a massive data center complex proposed in the West Valley, said the three-year freeze is a good first step.<\/p>\n

\u201cLet them pay the full amount if they want to come in here and build in our communities,\u201d she said. \u201cLet them pay the full amount.\u201d<\/p>\n

Project Baccara would put two data centers and a gas power plant on a 160-acre site in unincorporated Maricopa County off Olive Avenue and Litchfield Road near Luke Air Force Base.<\/p>\n

\u201cI think we’re building so many, and we’re doing it so fast, and we don’t know what the full impact is going to be to our state,\u201d she said.<\/p>\n

Butler said the community hasn\u2019t had enough say in the process, adding that some people are just finding out about the project.<\/p>\n

\u201cWe’re learning this as we go, and the more we learn, the worse it seems,\u201d she said.<\/p>\n

Butler said she\u2019s worried about Project Baccara\u2019s water usage and effects on the environment. And she said she\u2019s already seeing increases in her water and electric bills as infrastructure to support the data center complex is built.<\/p>\n

\u201cWe’re going to end up helping pay for it, and I don’t think that the community should,\u201d she said.<\/p>\n

Read more Mega Millions jackpot reaches 11th $600 million drawing<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

A three-year moratorium on state tax incentives for data centers gives Arizona time to chart a new strategy, Gov. Katie Hobbs said.<\/p>\n","protected":false},"author":1,"featured_media":2970,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":["post-2971","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-arizona-news"],"yoast_head":"\nWhy Arizona has frozen state tax breaks for data centers for three years - Arizona Moving Insider<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/arizonamovinginsider.com\/?p=2971\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why Arizona has frozen state tax breaks for data centers for three years - Arizona Moving Insider\" \/>\n<meta property=\"og:description\" content=\"A three-year moratorium on state tax incentives for data centers gives Arizona time to chart a new strategy, Gov. 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