{"id":1764,"date":"2026-06-05T12:34:00","date_gmt":"2026-06-05T12:34:00","guid":{"rendered":"https:\/\/scottsdalemovinghub.com\/?p=1764"},"modified":"2026-06-05T12:34:00","modified_gmt":"2026-06-05T12:34:00","slug":"why-arizonas-data-center-tax-breaks-are-at-the-center-of-state-budget-negotiations","status":"publish","type":"post","link":"https:\/\/scottsdalemovinghub.com\/?p=1764","title":{"rendered":"Why Arizona’s data center tax breaks are at the center of state budget negotiations"},"content":{"rendered":"
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PHOENIX \u2014 Arizona lawmakers are weighing the future of data center tax incentives as budget negotiations continue ahead of a June 30 deadline, with advocates pushing for repeal and business leaders defending the program.<\/p>\n

Read more Man injured in a shooting involving an Avondale police officer in Litchfield Park<\/a><\/p>\n<\/p><\/div>\n

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Outside the Arizona State Capitol on June 4, members of the People First Economy Coalition gathered to argue the state should redirect tax dollars away from corporate incentives and toward public services.<\/p>\n<\/p><\/div>\n

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“What we’re asking is to fund our schools, fund public health services, fund housing and housing programs and also not prioritize corporate tax giveaways like data centers,” said Stephanie Maldonado, political director at the Arizona Center for Empowerment.<\/p>\n<\/p><\/div>\n

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She and other community members are pushing lawmakers to eliminate Arizona’s data center tax incentive program, which provides state, county and local tax exemptions on qualifying equipment purchases for companies that build or expand computer data centers in Arizona.<\/p>\n<\/p><\/div>\n

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Under the program, administered by the Arizona Commerce Authority and the Arizona Department of Revenue, qualifying data center owners, operators and tenants can receive transaction privilege tax and use tax exemptions for up to 10 years after certification. Projects that qualify as sustainable redevelopment projects can receive the exemptions for up to 20 years.<\/p>\n<\/p><\/div>\n

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To qualify, companies must meet investment thresholds from $25 million to $50 million, depending on location, while some projects require investments of at least $200 million.<\/p>\n<\/p><\/div>\n

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“We want to divest from corporate giveaways to invest in community programs that are widely popular,” Maldonado said, citing concerns about environmental impacts, including water and land use tied to large-scale data center development.<\/p>\n<\/p><\/div>\n

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RELATED:<\/strong> Data center ‘heat waste’ puts strain on nearby houses and drives up their AC bills, ASU researcher says<\/p>\n<\/p><\/div>\n

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The debate intensified after Gov. Katie Hobbs vetoed a $17.9 billion Republican-backed budget proposal in May. According to her office, one of several concerns was a proposed $30 million tax break for data centers.<\/p>\n<\/p><\/div>\n

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Supporters of the incentives argue they are critical to Arizona’s economic growth and competitiveness.<\/p>\n<\/p><\/div>\n

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“It’s an interesting and exciting fight right now,” said Danny Seiden, president and CEO of the Arizona Chamber of Commerce and Industry.<\/p>\n<\/p><\/div>\n

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Seiden pushed back on environmental concerns, saying modern data centers often use closed-loop water systems that recycle water and reduce overall consumption. He said budget negotiations have been nonstop as lawmakers work toward a final spending plan.<\/p>\n<\/p><\/div>\n

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“This is about economic development, competition and national security. There’s a lot of things happening here,” he said.<\/p>\n<\/p><\/div>\n

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Arizona’s data center tax incentive program has existed since 2013. Seiden said it helps attract major investments and technology-related development to the state.<\/p>\n

Read more Marjane Satrapi, cartoonist known for Oscar-nominated \u2018Persepolis,\u2019 dies at 56.<\/a><\/p>\n<\/p><\/div>\n

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“That’s why we’re having this massive manufacturing boom,” Seiden said.<\/p>\n<\/p><\/div>\n

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The incentives are designed to reduce the cost of building large-scale data centers in Arizona.<\/p>\n<\/p><\/div>\n

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“It’s meant to really help cut down the cost of building these massive projects here, but you know, leads to a lot of construction jobs,” Seiden said.<\/p>\n<\/p><\/div>\n

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While Seiden acknowledged many of those construction jobs are temporary, he said the broader benefit comes from attracting technology companies and related industries to Arizona.<\/p>\n<\/p><\/div>\n

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In a statement to 12News, the Data Center Coalition said the industry plays a significant role in Arizona\u2019s economy, citing billions in economic output and more than 80,000 jobs statewide, while also emphasizing investments in water and energy efficiency and paying utility costs associated with operations.<\/p>\n<\/p><\/div>\n

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Opponents, however, argue that taxpayers are not receiving enough incentives.<\/p>\n<\/p><\/div>\n

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“Since Arizona taxpayers are investing into our state budget, the money should go back to Arizona taxpayers,” Maldonado said.<\/p>\n<\/p><\/div>\n

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Lawmakers have until June 30 to approve a budget before the start of the state’s new fiscal year on July 1.<\/p>\n<\/p><\/div>\n

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>> Download the 12News app for the latest local breaking news straight to your phone.<\/strong><\/em><\/p>\n<\/p><\/div>\n

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Watch the 12News Streaming App for free <\/strong><\/u>\u00a0<\/p>\n<\/p><\/div>\n

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12News streaming showcases live video throughout the day for breaking news, local news, weather and even an occasional moment of Zen showcasing breathtaking sights from across Arizona. \u00a0<\/p>\n<\/p><\/div>\n

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Users can also watch on-demand videos of top stories, local politics, I-Team investigations, Arizona-specific features and vintage videos from the 12News archives. \u00a0<\/p>\n<\/p><\/div>\n

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Read more Senate passes $70B bill to fund ICE without limits on Trump settlement fund<\/a><\/p>\n<\/p><\/div>\n

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<\/em><\/p>\n<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

PHOENIX \u2014 Arizona lawmakers are weighing the future of data center tax incentives as budget negotiations continue ahead of a June 30 deadline, with advocates pushing for repeal and business leaders defending the program. 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