Hawley Introduced Bill to Cut Data Center Tax Breaks

The proposed legislation targets tax incentives currently used by tech firms for data center construction.

Updated on Sept. 21, 2026 in Data Centers

Isometric editorial illustration of a large industrial data center building, representing tech infrastructure policy and tax incentive regulation. — Senator Josh Hawley has introduced the No Tax Breaks for Data Centers Act, aimed at prohibiting tech companies from utilizing Opportunity Zone tax incentives. AI Illustration. Upload story photo >

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Should large technology companies be eligible for tax breaks intended to help low-income communities?

Senator Josh Hawley has introduced the No Tax Breaks for Data Centers Act. The bill aims to restrict opportunity zone tax incentives for companies building data centers in low-income communities.

Why it matters

The legislation seeks to ensure that tax benefits intended to spur investment in distressed neighborhoods are not diverted to tech industry infrastructure projects. It addresses concerns that data centers are utilizing these incentives to reduce their development costs.

Between 14 percent and 17 percent of all U.S. data centers are situated within designated opportunity zones. The proposed bill amends the tax code to explicitly restrict these facilities from qualifying for the program.

The players

Josh Hawley

He is a United States Senator who introduced the No Tax Breaks for Data Centers Act.

The details

The No Tax Breaks for Data Centers Act would amend the tax code to bar data center projects from accessing financial incentives established by the 2017 Opportunity Zone program. Currently, tech companies leverage these tax breaks to construct large-scale facilities in areas intended for economic revitalization.

Congress enacted the Opportunity Zone program in 2017.
Senator Josh Hawley introduced the bill in September 2026.

The Tech Race

This legislation represents a shift in how federal tax policy interacts with the rapidly expanding digital infrastructure sector. It mirrors broader efforts to refine how tax incentives, originally designed for community development, align with modern industrial growth.

If passed, the bill could influence the location and operational costs for new data center projects across the country. Residents in designated zones may see changes in how commercial investment is directed toward their local economies.

The takeaway

Legislators are increasingly scrutinizing the alignment between tech infrastructure needs and public economic incentives. Taxpayers should monitor these shifts as they could alter the competitive landscape for regional development and infrastructure funding.