{"id":1892,"date":"2026-06-11T17:34:22","date_gmt":"2026-06-11T17:34:22","guid":{"rendered":"https:\/\/tucsonmovingreport.com\/?p=1892"},"modified":"2026-06-11T17:34:22","modified_gmt":"2026-06-11T17:34:22","slug":"arizona-budget-deal-includes-3-year-pause-on-data-center-tax-exemptions","status":"publish","type":"post","link":"https:\/\/tucsonmovingreport.com\/?p=1892","title":{"rendered":"Arizona budget deal includes 3-year pause on data center tax exemptions"},"content":{"rendered":"
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PHOENIX (AZFamily)<\/b> \u2014 State leaders announced Tuesday that they reached a budget deal, ending months of negotiations three weeks ahead of their deadline.<\/p>\n

Read more WATCH: New video shows Maricopa County ballot scanner removal<\/a><\/p>\n

The agreement includes a moratorium on data center tax exemptions.<\/p>\n

The two sides agreed on a three-year pause on tax exemptions for new data centers. The tax exemption has stood for more than a decade and was a major point in the budget fight. It is viewed as a major reason data centers have proliferated across the state.<\/p>\n

Data center growth in Arizona<\/h2>\n

Arizona is home to more than 150 data centers, according to the research tool Data Center Map.<\/p>\n

\u201cI think that a lot of people are really concerned when they see data centers going in that use a lot of power and they\u2019re worried that that is going to make their utility bills higher. We are working really hard to make sure that doesn\u2019t happen,\u201d Gov. Katie Hobbs said.<\/p>\n

The tax exemptions were enacted in 2013 as a way to incentivize tech companies to build data centers in Arizona. In her State of the State address, Hobbs said she voted for it back then, but now wants to eliminate what she called a $38 million corporate handout.<\/p>\n

Senate Majority Leader John Kavanagh said that was a nonstarter.<\/p>\n

\u201cWe had a problem with that because we\u2019ve already given them the incentives, which last for five to 10 years, to a lot of data centers. So had we canceled them, we\u2019d be in court,\u201d Kavanagh said.<\/p>\n

Republicans protected the tax exemptions in their budget, which Hobbs called \u201cunbalanced and reckless\u201d when she vetoed it.<\/p>\n

Details of the compromise<\/h2>\n

The pause does not affect data centers already receiving tax breaks, and companies can still build data centers without tax exemptions.<\/p>\n

Depending on the county population, a new data center would need to make a minimum investment of $25 million or $50 million to get the tax exemption, which would last, in most cases, up to 10 years.<\/p>\n

\u201cThey are great for economic development and national security,\u201d Kavanagh said. \u201cData centers are part of the new world, and we just have to have them develop responsibly.\u201d<\/p>\n

Read more Man seriously injured in west Phoenix shooting<\/a><\/p>\n

Danny Seiden, President and CEO of the Arizona Chamber of Commerce and Industry, said the tax exemptions have done a good job bringing investments and business to the state.<\/p>\n

\u201cThere\u2019s going to be plenty of states out there foaming at the mouth to jump on the fact that Ohio and us and others are starting to kind of send up a signal that, hey, right now we\u2019re not sure if we want you here. When in reality we do. We do want these large capital investments that come from data centers, especially because these are good corporate citizens now who are willing to invest in infrastructure that benefits the whole community,\u201d Seiden said.<\/p>\n

Seiden is hopeful that the tax exemptions can come back in some capacity, either after the three years is up or possibly even before.<\/p>\n

Data centers have sparked concerns over their use of water and energy, and their effect on the environment.<\/p>\n

\u201cI think there\u2019s bipartisan support to make sure that we\u2019re not being taken over by data centers and certainly that they\u2019re not making costs in our state go up,\u201d said Hobbs. \u201cIt gives us time to make sure that data centers are actually working for Arizonans.\u201d<\/p>\n

The budget bills will be heard during a joint session of the Wednesday before a full vote is expected Thursday.<\/p>\n

See a spelling or grammatical error in our story? <\/i>Please click here to report it<\/i>.<\/i><\/p>\n

Do you have a photo or video of a breaking news story? Send <\/i>it to us here<\/i> with a brief description.<\/i><\/p>\n

Read more New Buc-ee\u2019s update with first-ever Arizona opening less than 2 weeks away<\/a><\/p>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Arizona leaders say they have a budget deal that includes a key compromise that puts new data center tax breaks on hold for three years.<\/p>\n","protected":false},"author":1,"featured_media":1891,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1892","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interesting"],"yoast_head":"\nArizona budget deal includes 3-year pause on data center tax exemptions - Tucson Moving Report<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tucsonmovingreport.com\/?p=1892\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Arizona budget deal includes 3-year pause on data center tax exemptions - 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