Rural data center projects across the United States will become eligible for a new set of corporate tax benefits on January 1, under a program expanded by the One Big Beautiful Bill Act. The change opens the opportunity zone program to tracts of rural land nationwide. According to Ways and Means Committee chair Jason Smith, the new rules could significantly lower barriers for large-scale, capital-intensive projects in rural areas, most notably hyperscale data centers. Smith said the economic case for building data centers in designated rural opportunity zones becomes far more compelling under the program.
Emily Kraschel, a tax policy analyst at the Searchlight Institute, cautioned that the benefits for rural communities could be mixed. She noted that the only current requirement to receive the benefits is capital investment, which does not guarantee job creation or a local economic boost. Kraschel said a more traditional factory requiring many workers would offer more certainty on that front, while the assumption becomes uncertain with a data center.
The opportunity zone program was proposed during the first Trump administration by a bipartisan group of lawmakers and offers tax benefits for projects built in certain low-income census tracts. The One Big Beautiful Bill Act made a number of changes last year to draw more investment to rural areas. Kraschel and her Searchlight colleagues compared the locations of data center projects in development with rural census tracts eligible for the new program. WIRED exclusively reviewed the research and found more than 100 data centers in various stages of development in rural areas that could be eligible.
Searchlight compiled its research using a conservative database of under 700 planned or under-construction data center projects, though other datasets put the number of data centers in development in the US at closer to 1,500. The count of newly eligible projects is likely larger. Separate research from Pew found that 13 percent of operating data centers are located in rural areas, while around 67 percent of planned facilities are going rural.
The research arrives as backlash against data centers from rural and GOP voters intensifies. Tax breaks for data centers built by powerful companies have become a flashpoint: Amazon recently drew headlines for attempting to negotiate a lower tax bill on one of dozens of data centers it plans to open in Mississippi, and The New York Times reported last week that Meta is writing off data center equipment under a federal tax break intended for research and experimentation. Last month, Senator Josh Hawley introduced legislation that would eliminate opportunity zone funding for data centers, saying he would help ensure Big Tech companies do not get tax breaks to build data centers on farmland.
Simply existing in a rural opportunity zone does not automatically grant the benefits; a company must create a specialized investment vehicle to start the process. Because the tax break can be considered confidential IRS data, it is nearly impossible to know which companies pursue the benefits unless they disclose it voluntarily. WIRED contacted Meta, Amazon, Microsoft, and Google, all of which are developing data centers in areas that could be eligible. Microsoft, Meta, and Amazon all denied using the program.
Microsoft’s general counsel of infrastructure legal affairs, Rima Alaily, said the company does not use the opportunity zone program to invest in the purchase or construction of its data centers. Amazon spokesperson Julia Lawless said the company does not actively seek out land in opportunity zones and has not claimed the tax benefit for its projects. Google did not respond. Nathan Jensen, a government professor at the University of Texas-Austin, said he would be very surprised if some companies were not considering siting in rural opportunity zones as part of their decisionmaking. The government estimates the expansion of the opportunity zone program to rural areas will cost $40.9 billion over the next decade.
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