More than 100 rural data center projects could qualify for an expanded federal tax break starting January 1, Wired reports

What happened

A federal tax benefit program expanded by the One Big Beautiful Bill Act will begin covering projects in rural areas on January 1, and data centers could be among the biggest beneficiaries, Wired reported. The outlet reviewed research from the Searchlight Institute, a public policy think tank, and found more than 100 data centers in various stages of development in rural areas that could be eligible.

Wired reported that experts warn the results for rural communities could be mixed, because the program does not require projects to create jobs. For more on how the technology industry is reshaping communities, see our AI and tech coverage.

How the opportunity zone program works

Rural tracts newly eligible

According to Wired, the opportunity zone program was proposed by a bipartisan group of lawmakers during the first Trump administration. It gives tax benefits to companies that build projects in certain low-income census tracts. The One Big Beautiful Bill Act made changes to the program to attract more investment to rural areas.

Ways and Means Committee chair Jason Smith said in a statement last year that the new rules may lower barriers for large projects in rural areas, most notably hyperscale data centers, Wired reported. The government estimates the rural expansion will cost $40.9 billion over the next decade, according to Wired.

No job requirement

Emily Kraschel, a tax policy analyst at Searchlight, told Wired that capital investment is currently the only requirement for the benefits. She said that does not guarantee jobs or a local economic boost, as a traditional factory with many workers might. Wired noted that data centers may create construction jobs in the short term, but whether they build a lasting workforce is still debated.

Being located in a rural opportunity zone does not automatically qualify a project. Wired reported that a company must set up a specialized investment vehicle, and because the tax break can be treated as confidential IRS data, it is nearly impossible to know which companies are pursuing it unless they disclose it.

What the research found

A conservative count

Searchlight compared a database of under 700 planned or under-construction data center projects with eligible rural tracts, Wired reported. Other datasets put the number of data centers in development in the US closer to 1,500, and Wired said the number of eligible projects is very likely larger. Wired also cited Pew research finding that just 13 percent of operating data centers are in rural areas, while around 67 percent of planned facilities are going rural.

Big tech companies say they are not using it

Wired asked Meta, Amazon, Microsoft and Google about their plans. Microsoft, Meta and Amazon denied using the program, and Google did not respond. Microsoft's Rima Alaily told Wired 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 has not used the program for site selection and has no plans to add it to its criteria.

Nathan Jensen, a government professor at the University of Texas-Austin, told Wired he would be "very surprised" if some companies were not weighing rural opportunity zones when choosing sites.

Why it is drawing debate

Wired reported that the research comes amid a growing backlash against data centers, including from rural and GOP voters. Senator Josh Hawley introduced legislation last month to eliminate opportunity zone funding for data centers, saying it would "ensure Big Tech companies don't get tax breaks to build data centers on farmland." For a local look at data center costs, see our report on who pays for data center power in North Las Vegas.

"Lawmakers need to decide what they really want out of these investments," Kraschel told Wired. Separately, Amazon on Friday pledged $1 billion over the next five years for initiatives in communities where it builds data centers and confirmed it no longer uses nondisclosure agreements with public officials, Wired reported.

What to watch next

• The expanded opportunity zone benefits for rural tracts take effect January 1, according to Wired.
• Whether data centers create a lasting workforce over the longer term remains an ongoing debate, Wired reported.
• Amazon's $1 billion community investment pledge is set to roll out over the next five years, Wired reported.