Arizona Governor Proposes Ending Data Center Tax Incentives Amid New Jersey Legislation on Electricity Costs
Arizona Governor Katie Hobbs has proposed ending tax incentives for data center operators, which currently cost the state $38 million annually. In contrast, New Jersey's former Governor Phil Murphy pocket vetoed legislation to increase electricity costs for large data centers, which must be reintroduced by the new governor. Analysts suggest that while the removal of incentives in Arizona may slightly diminish its appeal, the state's favorable business environment could still attract developers.
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Arizona Governor Katie Hobbs announced plans to eliminate tax incentives for data center operators, which cost the state $38 million annually. These incentives have been in place for over a decade and require operators to invest at least $50 million in Maricopa or Pima counties, or $25 million in other counties.
Meanwhile, in New Jersey, a bill aimed at increasing electricity costs for large data center operators was pocket vetoed by former Governor Phil Murphy. This legislation would have imposed tariffs on operators using over 100 megawatts per month and must be reintroduced for consideration by new Governor Mikie Sherrill.
Analysts suggest that while the removal of Arizona's tax incentives may slightly reduce its attractiveness, the state's favorable business environment could still appeal to developers. New Jersey, with high power costs, is not seen as a primary market for data centers, and such legislative changes may have limited impact.
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