AR — State Policy Updated 2026-07-17

Arkansas

Sales/use tax exemption for qualified data centers Other incentives Moratoriums Zoning and land use Environmental and infrastructure constraints

1) Incentive programs (state-level)

Sales/use tax exemption for qualified data centers (Act 819 of 2023, amended by Act 548 of 2025)

  • Incentive type: Exemption from Arkansas gross receipts (sales) tax and compensating use tax for data center equipment, eligible data center costs, certain services, and electricity used by a qualified data center; Act 548 of 2025 also created a “qualified large data center” category. Arkansas General Assembly, 2023; Arkansas General Assembly, 2025
  • Eligibility thresholds (Qualified Data Center): Act 819 required $500M qualified investment within 5 years of certificate of occupancy and $1M aggregate annualized compensation in the first two years after operations start; Act 548 reduced the investment threshold to $100M within 5 years after construction commences and clarified that direct or indirect compensation, including contractor-paid compensation, can count toward the $1M compensation threshold. Arkansas General Assembly, 2023; Arkansas General Assembly, 2025
  • Eligibility thresholds (Qualified Large Data Center — created by Act 548): Act 548 requires $2B qualified investment within 10 years after construction commences and $3M aggregate annualized compensation in the first two years after operations begin; facilities primarily engaged in virtual-currency transaction validation are excluded. Arkansas General Assembly, 2025
  • Administration: Act 819 placed certification and compliance with the Arkansas Economic Development Commission (AEDC); Act 548 shifted applications and compliance to the Department of Finance and Administration (DFA). Arkansas General Assembly, 2023; Arkansas General Assembly, 2025
  • Timing / duration: Eligibility depends on meeting investment and compensation thresholds within the specified 5-year or 10-year windows after construction begins (or after certificate of occupancy in the original 2023 law). Arkansas General Assembly, 2023; Arkansas General Assembly, 2025
  • Sunset dates / clean energy conditions: Neither Act 819 nor Act 548 contains a sunset date or a statutory clean-energy requirement in the exemption text. Arkansas General Assembly, 2023; Arkansas General Assembly, 2025

Other incentives

2) Restrictions and moratoriums

Moratoriums

  • Statewide moratorium: No statewide moratorium on data center construction was enacted between February 1 and July 17, 2026. The 2026 fiscal-session data-center/digital-mining resolutions died in the Senate at sine die adjournment. University of Arkansas Extension, 2026-05-15; Arkansas State Legislature SR7, 2026-04-29; Arkansas State Legislature SR12, 2026-04-29
  • Pulaski County moratorium attempt: Pulaski County’s Quorum Court initially appeared to approve a one-year emergency moratorium on new data centers on May 26, 2026, but the county clerk later corrected the tally; the ordinance received fewer than the 10 votes needed for an emergency ordinance and did not take effect. Little Rock Public Radio, 2026-05-28
  • Pulaski County proposals remained pending: After the failed May vote, the July 14 Agenda Committee considered two new 12-month proposals, Items 26-I-45A and 26-I-52, and advanced one proposal to the full Quorum Court; neither was in force by July 17. The Planning Board separately scheduled a second public hearing for July 23, after this update’s cutoff. Pulaski County Agenda Committee, 2026-07-14; Pulaski County, accessed 2026-07-17
  • Carroll County moratorium: The Quorum Court unanimously adopted emergency Ordinance 2026-17 on June 16, immediately imposing a 12-month pause on construction and authorization of high-impact industrial and high-intensity digital infrastructure facilities, including data centers, AI computing facilities, and cryptocurrency mines, while the county develops permanent rules. KY3, 2026-06-16
  • Union County moratorium: The Quorum Court unanimously adopted Ordinance 1795 on June 30, creating a one-year moratorium on new data center development from July 10, 2026 through July 9, 2027 while the county studies effects on water, electricity, other utilities, emergency services, property, zoning, and operations. South Arkansas Now, 2026-06-30
  • Little Rock hyperscale proposal deferred: A proposed amendment to Ordinance 22,784 would stop the city from accepting new hyperscale-data-center zoning applications until January 1, 2027, except for the 300,000-square-foot facility covered by the April 2025 city MOU. At the sponsor’s request, the Board deferred the proposal on July 7 until August 4, so it was not in effect by July 17. City of Little Rock, 2026-07-07

Zoning and land use (local)

  • County zoning authority: Counties may adopt zoning ordinances for unincorporated areas regulating land use and building parameters, so whether a data center is by-right, conditional, or requires a special exception depends on the applicable county ordinance. Ark. Code § 14-17-209
  • Municipal planning authority: Cities may create planning commissions and adopt municipal zoning and land-use regulations governing data center siting in city limits. Ark. Code § 14-56-404
  • Little Rock ordinance adopted June 2, 2026: Little Rock adopted Ordinance No. 22,784. It defines accessory, major, and hyperscale data centers; places accessory and major facilities in specified industrial districts and allows all three categories in I-3; and sets generator, cooling, water-reporting, utility-capacity, noise, screening, setback, monitoring, and annual-reporting standards. Open-loop and once-through cooling and evaporative-only systems using potable water as the primary cooling medium are prohibited. City of Little Rock Ordinance No. 22,784, 2026-06-02; City of Little Rock, 2026-07-07
  • Fayetteville ordinance adopted June 16, 2026: Fayetteville adopted Ordinance 7010 by an 8-0 vote, effective immediately. Data centers are conditional uses only in I-2 General Industrial districts and require Planning Commission approval; applicants must document utility capacity and anticipated water use, submit an energy-management plan, use air cooling or high-efficiency liquid cooling, meet standards for backup generators, observe a 1,000-foot residential-zoning separation and 100-foot landscape buffer, and provide continuing public reporting. The ordinance does not require batteries as the primary backup-power source. City of Fayetteville legislative record, 2026-06-16; Fayetteville Flyer, 2026-06-16
  • Clarksville industrial-technology district: Clarksville adopted emergency Ordinance 26-1000 on May 11, creating an Industrial Technology (I-T) district limited to data centers and supporting uses. The ordinance allows up to 90% lot coverage, or 95% with added buffering/beautification, and prohibits drilling, excavation, or heavy-equipment operation within 500 feet of specified critical facilities. City of Clarksville Ordinance 26-1000, published 2026-05-20
  • Conway public process and project scale: Conway called a public committee meeting for May 12, 2026, on a proposed Lollie Road campus, and residents protested its tax, water, and power implications. Subsequent reporting placed the site at more than 700 acres, the initial investment at least $1B in construction plus $1B in equipment, and potential buildout at $10B; the project would use reclaimed municipal wastewater for cooling and could take up to 1,000 MW from Entergy plus up to 10 MW from Conway Corp. City of Conway, 2026-05-05; KATV, 2026-05-17; Arkansas Business, 2026-05-18

Environmental and infrastructure constraints

  • Water withdrawal reporting: Non-domestic users of groundwater from wells capable of withdrawing >= 50,000 gallons/day or surface-water users withdrawing >= 1 acre-foot/year must report withdrawals to the Arkansas Natural Resources Commission; large cooling loads may trigger reporting obligations. Arkansas Code § 15-22-302, accessed 2026-07-17; Code of Arkansas Rules 15 CAR § 21-202, accessed 2026-07-17; Code of Arkansas Rules 15 CAR § 20-202, accessed 2026-07-17
  • Water permitting: Facilities that discharge wastewater to waters of the state require NPDES permits, and no-discharge wastewater systems require state No-Discharge permits. Arkansas DEQ, accessed 2026-07-17; Arkansas DEQ, accessed 2026-07-17
  • Power/transmission infrastructure: Construction of a major utility facility such as large transmission lines or substations generally requires a Certificate of Environmental Compatibility and Public Need from the Arkansas Public Service Commission. Ark. Code § 23-18-510
  • Little Rock / Willowbend wetland permit: The Corps’ revised Public Notice SWL-2026-00038 describes five approximately 285,300-square-foot data-center buildings totaling about 1.43 million square feet, plus support buildings, a roughly 20-acre substation/switching station, and a likely load above 100 MW. The application proposes filling approximately 16.8 acres of wetlands and 6,419 linear feet of streams. The comment period expired May 1; the public docket did not show a final permit determination by July 17. U.S. Army Corps of Engineers, 2026-04-06
  • Central Arkansas water concerns: Central Arkansas Water and local officials said in May 2026 that the two Little Rock-metro data centers could require up to 4 million gallons per day each on peak days, that no river, creek, or groundwater would be used, and that Google and AVAIO would cover any water-system upgrades. KATV, 2026-05-12
  • Clarksville air and stormwater permitting: State records reported in March showed active construction-stormwater coverage for site clearing and an air-permit requirement for a planned four-building phase with 18 emergency generators totaling about 55.2 MW. Johnson County Graphic, 2026-03-03
  • Noise: Noise limits remain primarily local. Little Rock requires pre-application acoustical analysis for hyperscale facilities, post-construction verification, permanent monitoring for major and hyperscale facilities, and property-line limits that vary by adjacent use and time of day; Fayetteville retains its separate acoustic-study and noise-attenuation rules. City of Little Rock Ordinance No. 22,784, 2026-06-02; Fayetteville Code of Ordinances, 2026-06-16

3) Local governance and preemption

  • Local zoning remains active, but Act 851 constrains discriminatory digital-asset-mining regulation: Arkansas counties and municipalities retain general zoning and police-power tools, but the Arkansas Data Centers Act of 2023 limits local governments from imposing requirements on digital-asset mining businesses that differ from requirements for data centers and from imposing certain discriminatory requirements or taxes. Ark. Code § 14-17-209; Ark. Code § 14-56-404; Arkansas General Assembly Act 851, 2023-04-13
  • Local police power for nuisance/noise: Cities have authority to prevent and punish noise and nuisances, supporting local noise-control ordinances that affect data center operations. Ark. Code § 14-54-103
  • Community opposition broadened in 2026: Public concern about water, electric rates, environmental impacts, noise, disclosure, and local fiscal tradeoffs spread from Pulaski and Faulkner counties to Carroll, Union, and Johnson counties, contributing to two enacted county moratoriums, Pulaski and Little Rock proposals, Fayetteville’s standards, and a July 13 citizen-organized Clarksville forum. Clarksville residents continued to raise transparency and environmental questions, and the City Council tabled four related bond and Tax Back resolutions that evening rather than approving them. Arkansas Advocate / News From The States, 2026-05-19; KY3, 2026-06-16; South Arkansas Now, 2026-06-30; Johnson County Graphic, 2026-07-14; Johnson County Graphic, 2026-07-14

4) Legislative activity (2024-2026)

5) Notable projects (announced / under construction / operational)

  • Google — West Memphis / Project Pyramid: Google began construction in 2025 on a West Memphis data center campus described by AEDC as a multi-billion-dollar project on more than 1,000 acres; Entergy later stated that Arkansas customers could receive up to $1.7B in savings from the Google and AVAIO projects and that Google agreed to support a 600-MW solar and 350-MW battery facility. AEDC, 2025-10-02; Entergy, 2026-03-05
  • AVAIO Digital — Project Leo, Little Rock / Pulaski County: AVAIO announced a $6B first-phase investment in January 2026, with more than 500 permanent operations jobs and thousands of construction jobs expected; AVAIO’s current campus page says Project Leo is a 760-acre site that has broken ground, has an initial fully contracted 150-MW grid connection, targets first occupancy in June 2027, and could scale to 1.07 GW total baseload power through grid and behind-the-meter resources. AVAIO Digital, 2026-01-12; AVAIO Digital, accessed 2026-07-17
  • Google / Willowbend — Port of Little Rock: Google confirmed that it purchased Port land in April 2026 but, as of July 17, described the site as a potential data center still in the very early evaluation stage. The revised Corps application contemplates five data-center buildings totaling about 1.43 million square feet and likely drawing more than 100 MW; Google had not announced a final investment decision. Google, accessed 2026-07-17; U.S. Army Corps of Engineers, 2026-04-06
  • Serverfarm — Clarksville / Johnson County: Serverfarm estimates a $6.6B multi-building campus and says site preparation is underway, with the first two buildings targeted for January 2028. A draft municipal electric-service agreement covered 318 MW for phase one, while Solaris disclosed a separate 10-year agreement to provide Hatchbo LLC more than 500 MW of generation equipment for the data center beginning in the first quarter of 2027. Clarksville noticed ceilings of up to $5B in industrial-development revenue bonds for SF ARK1 real property and up to $50B for Hatchbo equipment; those are financing authorizations, not stated project costs, and the City Council unanimously tabled the four bond/Tax Back resolutions on July 13. Serverfarm, accessed 2026-07-17; Johnson County Graphic, 2026-06-23; Solaris Energy Infrastructure Form 10-Q, 2026-05-01; City of Clarksville public notice, 2026-07-01; City of Clarksville public notice, 2026-07-01; Johnson County Graphic, 2026-07-14
  • Conway / Lollie Road area: A major technology company purchased more than 700 acres for a campus in engineering and design. The disclosed initial investment is at least $1B for construction and $1B for equipment, with potential scale to $10B; planned electric service is up to 1,000 MW from Entergy plus up to 10 MW from Conway Corp. Arkansas Business, 2026-05-18
  • Union County Campus — El Dorado: Z Squared announced a binding letter of intent to acquire a majority of Paradox Data LLC. The proposed transaction would include about 10 acres under purchase contract and an operating 8-MW facility; the larger campus concept targets as much as 150 MW using utility service and behind-the-meter generation. Closing remains subject to diligence, definitive agreements, and approvals, so this is a proposed acquisition and expansion rather than a completed project. U.S. SEC / Z Squared, 2026-06-25
  • Project Pulse — Gum Springs / Clark County (canceled): The Economic Development Corp. of Clark County approved an $11.4M sale agreement for the 991-acre Southwest Arkansas Mega Site on April 16 for a proposed data center with at least $1B of investment and 150 jobs. The agreement formally terminated on May 1 before closing after DC Devco failed to make the required $200,000 earnest-money deposit by the deadline. The Arkadelphian, 2026-04-16; The Arkadelphian, 2026-05-01

Gaps / follow-ups to consider

  • Track the Pulaski County full Quorum Court and Planning Board after July 17 for disposition of Items 26-I-45A/26-I-52 and the broader regulatory package.
  • Track Little Rock’s deferred hyperscale moratorium at the August 4 Board meeting.
  • Track the Corps’ SWL-2026-00038 docket for a final wetlands/stream decision and Google’s separate final investment decision on Willowbend.
  • Track Clarksville’s tabled industrial-development-bond and Tax Back resolutions, the still-unexecuted municipal utility agreements, and final state air permitting; the financing-notice amounts are ceilings and should not be treated as project investment.