Arizona Data Center Tax Incentive Moratorium (3-year, 2026)
Arizona Three-Year Moratorium on New Data Center Sales Tax Exemptions (FY 2027 Budget)
Arizona · Arizona FY 2027 Budget Bill (signed June 13, 2026); three-year data center sales tax exemption moratorium
- Status
- In effect
- Took effect
- July 1, 2026
- Applies to
- Arizona Department of Revenue; data center developers seeking new sales-tax exemption certificates
- Enforced by
- Arizona Department of Revenue
Arizona Governor Katie Hobbs signed the state's $18.3 billion FY 2027 budget on June 13, 2026, which included a bipartisan provision imposing a three-year pause on new sales tax exemptions for data centers (July 1, 2026 – June 30, 2029). Arizona's 2013 data-center sales-tax break costs the state roughly $38 million per year; existing exemptions remain in effect, but no new certificates can be issued until the moratorium lifts. The measure is projected to save $57 million over three fiscal years while policymakers study whether the incentives still serve the state's interests.
Who is protected: Arizona taxpayers and ratepayers; intended to force scrutiny of subsidy costs relative to water/energy impacts
Legal detail
Arizona FY 2027 budget bill (signed June 13, 2026; effective July 1, 2026 as FY2027 start) includes a three-year moratorium on new data center sales tax exemption certificates under the program established in 2013 (July 1, 2026 – June 30, 2029); existing holders are grandfathered. Saves an estimated $57M over the moratorium period ($38M/yr). Bipartisan budget deal between Gov. Hobbs and the Republican-led Legislature.
Key facts
| Jurisdiction | Arizona |
|---|---|
| Level | State |
| Strength | Limited |
| Enacted | June 13, 2026 |
| Citation | Arizona FY 2027 Budget Bill (signed June 13, 2026); three-year data center sales tax exemption moratorium |
| Topics | data-center siting and energy |
| Bill text | Arizona budget deal includes 3-year pause on data center tax exemptions — azfamily.com |
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Related data-center siting and energy rules elsewhere
- Superior WI Data Center Moratorium (1-year) · In effect
- Dane County WI Hyperscale Data Center Moratorium · In effect
- Madison WI Data Center Moratorium (1-year) · In effect
- Manitowoc County WI Data Center Moratorium · In effect
- WA SB 5982 (Data Center / Clean Energy) · In effect
- Dayton OH data center moratorium (180-day, Apr 2026) · In effect
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