Senator Moreno Introduces RECLAIM Act to Tax Data Centers
The proposed legislation would impose a 100% federal tax on state and local incentives granted to data center projects.
Updated on Oct. 15, 2026 in Data Centers
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Senator Bernie Moreno has introduced the Recapturing Excessive Corporate Largesse through Accountability and Incentive Measures Act, or RECLAIM Act. The bill seeks to effectively nullify local and state tax incentives for data centers through a 100% federal tax.
Why it matters
The proposed legislation aims to curb the use of public financial incentives for data center development by making them cost-prohibitive for companies. It also calls on local and state governments to repeal existing incentive programs for the sector.
The RECLAIM Act mandates a 100% federal tax on the value of local and state incentives provided to AI infrastructure. Additionally, the legislation bars the federal government from issuing any new incentives to data center companies.
The players
Bernie Moreno
Bernie Moreno is a United States Senator representing the state of Ohio who introduced the RECLAIM Act.
The details
The bill includes a sense of Congress provision explicitly urging states and localities to eliminate their own data center incentive packages. By applying a 100% tax on the value of these local benefits, the legislation targets the financial framework currently used by many jurisdictions to attract large-scale computing infrastructure.
Timeline
Senator Bernie Moreno introduced the RECLAIM Act on October 15, 2026.
The Tech Race
The RECLAIM Act marks a significant pivot in federal policy regarding infrastructure development, moving away from past federal support for technological expansion. It positions federal tax authorities to directly compete with the local incentive strategies that have historically driven the growth of massive, energy-intensive data hubs across the country.
If enacted, this legislation could lead to a significant slowdown in new data center construction as companies reassess the viability of projects without public subsidies. This may influence regional electricity prices and the pace of digital infrastructure expansion in areas currently competing for these facilities.
The takeaway
The RECLAIM Act represents a major legislative effort to prioritize federal tax control over state-level economic development competition for data centers. Stakeholders should monitor committee activity to see if this proposal influences upcoming state policy debates regarding technology investments.
Further reading
For broader context on the industry, visit Data Centers.
Source note: This article includes information reported by Washington Examiner.
Live Poll
Should local governments offer tax incentives to attract data centers to their communities?
