policy greenfield bias
on this page
overview
most state data center tax incentives are location-agnostic—they apply equally to greenfield and brownfield sites. this creates structural bias toward greenfield development because when incentives are equal, developers choose the lowest-cost, fastest site.
state incentive summary
| state | type | percentage | duration | annual cost |
|---|---|---|---|---|
| virginia | sales tax exemption | 100% | through 2035 | $1.02b (fy2024) |
| ohio | property tax abatement | 65-100% | 15-30 years | ~$357m/yr avg |
| texas (jeti) | property tax abatement | 50-75% | variable | n/a |
| arizona | property tax | up to 75% | up to 20 years | $19m (2024) |
| nevada | personal property | up to 75% | 10-20 years | ~$100m+ |
| georgia | sales tax exemption | 100% | ongoing | ~$296m by 2025 |
job creation requirements
| state | jobs required | investment required |
|---|---|---|
| texas | 20 jobs | $200m over 5 years |
| nevada | 10-50 jobs | $25m minimum |
| ohio (example) | 20 jobs | varies |
| alabama | 20 jobs | $40,000+ avg compensation |
note: requirements are modest relative to investment scale ($200m project requiring only 20 jobs).
the greenfield bias mechanism
when incentives are location-agnostic
- greenfield land costs 20-50x less than industrial
- greenfield power interconnection is 2-3 years faster
- greenfield has no remediation or demolition costs
- greenfield title is clear (2-3 landowners vs hundreds)
result
developers rationally choose greenfield when incentives are equal. brownfield barriers exceed any incentive value.
federal brownfield programs (limited)
| program | status | notes |
|---|---|---|
| brownfield tax incentive | expired jan 2012 | not reauthorized |
| ira energy community bonus | active | +10% tax credit for brownfield/coal sites |
| epa brownfields grants | active | assessment, cleanup, loan funds |
the federal brownfield tax deduction—which allowed remediation cost deductions—expired in 2012 and has not been renewed.
the michigan exception
michigan (jan 2025) created explicit brownfield preference:
- standard sites: tax exemption through 2050
- brownfield/former power plant sites: exemption through 2065 (15-year extension)
however: bipartisan repeal legislation introduced dec 2025 (11 months after enactment). program stability uncertain.
policy instability examples
| state | event | timeline |
|---|---|---|
| michigan | enacted jan 2025; repeal introduced dec 2025 | 11 months |
| georgia | legislature passed repeal; governor vetoed | 2024 |
| virginia | jlarc report: “does not pay for itself” | dec 2024 |
cumulative program costs
| state | program cost | period |
|---|---|---|
| virginia | $2.73b | 2021-2024 |
| virginia | $1.02b | fy2024 alone |
| ohio | $2.5b | 2017-2024 |
| arizona | $19m | 2024 (1,200% growth since 2020) |
| georgia | ~$296m | by 2025 (projected) |
| iowa | $151m | cumulative |
what would change the calculus
potential policy reforms
- brownfield interconnection priority: queue preference for sites reusing existing infrastructure
- enhanced remediation credits: tax credits covering 50-75% of remediation costs
- utility incentives for urban substations: rate structure rewarding grid-connected urban development
- brownfield-specific abatements: higher incentive percentage for brownfield vs greenfield
current reality
no state has implemented comprehensive brownfield preference. michigan’s attempt (15-year extension for brownfield) faces immediate repeal effort.
the jlarc assessment (virginia)
virginia’s joint legislative audit and review commission (2024):
- classified exemption as “moderate economic benefit”
- noted: “like most economic development incentives, the data center exemption does not pay for itself”
- 74,000 jobs supported; $5.5b annual labor income
- but: $1b+ annual cost to state revenue
sources
- virginia jlarc 2024 report
- ncsl legislative agenda reports
- jobsohio program documentation
- texas comptroller data center incentives
- state legislative records (michigan, georgia)
- good jobs first subsidy analysis