IA — State Policy Updated 2026-07-17

Iowa

Sales/use tax exemptions and refunds Property tax incentives 2026 changes to incentive law Statewide restrictions Local restrictions / moratoriums

1. Incentive programs

Sales/use tax exemptions and refunds (statewide)

  • Large data center exemption: Iowa continues to exempt qualifying data center purchases of computers, equipment, cooling systems, power infrastructure, backup-power fuel, and electricity from sales and use tax if the data center business makes at least $200 million of Iowa investment within the first six years of operation, operates at least 5,000 square feet, and meets Iowa sustainable design and construction standards Iowa Department of Revenue, 2025-11-03.
  • Duration: The exemption remains permanent for computers and other covered non-fuel/non-electricity property; for electricity and backup-power fuel, Iowa Department of Revenue guidance states that data centers operating before June 6, 2025 keep a permanent exemption, while projects operating on or after that date receive 10 years if located at least partly in a city over 30,000 population and 15 years if not Iowa Department of Revenue, 2025-11-03.
  • Reporting: A qualifying data center must register with the Department of Revenue and file an annual report by January 31 each year; the first report for the 2025 report year was due February 2, 2026 Iowa Department of Revenue, 2025-11-03.
  • Partial refund tiers: Iowa still provides partial sales/use tax refunds for smaller data center investments: a 50% refund for projects of at least $1 million but below the larger tier, and a 50% refund for projects of at least $10 million (or $5 million for rehabilitated buildings) but below $200 million, subject to investment timing, lease-duration, and filing requirements Iowa Department of Revenue, 2025-11-03.

Property tax incentives (statewide)

  • Property tax exemption: Iowa Code 427.1(37) exempts qualifying “data center business property” tied to the Iowa Code 423.3(95) data center definition; the exemption applies to specified equipment and related infrastructure, not land or buildings Iowa Department of Revenue, 2025-10-23.
  • Claim process: The property tax exemption must be filed with the local assessor by February 1 for the first year the exemption is claimed, using the Department of Revenue’s data center business property exemption form Iowa Department of Revenue, 2025-10-23.

2026 changes to incentive law

  • No new data-center-specific state incentive was enacted between February 1 and July 17, 2026. The largest new economic-development program, HF 2799’s EDGE Program, expressly excludes a “data center business” from eligibility, even though it covers some technology and innovation businesses Iowa Legislature, HF 2799 enrolled bill, 2026-06-02.
  • Technical correction: HF 2357, signed April 16, 2026, corrected the cross-reference in Iowa Code 423.4(8)(a) defining a data center business from Iowa Code 423.3(95)(e) to Iowa Code 423.3(95)(f); it did not create a new data center incentive Iowa Legislature, HF 2357 enrolled bill, 2026-04-16.
  • Urban-renewal/TIF limits: SF 2472, signed May 18, 2026, changed Iowa urban-renewal and tax-increment-financing rules by limiting new divisions of revenue to 23 years and, for certain old unlimited TIF districts, limiting municipal capture to 60% after the specified 20-year periods; a data-center-specific TIF provision appeared in a reprint but was removed from the enrolled act Iowa Legislature, SF 2472 enrolled bill, 2026-05-18 Iowa Legislature, SF 2472 reprint, 2026-04-21.
  • Nuclear incentive adjacent to data centers: HF 2757, signed June 1 and effective July 1, 2026, created a sales/use tax exemption and refund for nuclear electric generation facilities, with a workforce-fund contribution requirement; the final fiscal note ties the assumptions to the Duane Arnold Energy Center restart, a project being pursued in connection with Google load, but the law is a nuclear-generation incentive rather than a data center incentive Iowa Legislature, HF 2757 enrolled bill, 2026-06-01 Iowa Department of Revenue, 2026-07-02 Iowa Legislative Services Agency fiscal note, 2026-05-20.

2. Restrictions and moratoriums

Statewide restrictions

  • Water withdrawals: Iowa water-allocation permits remain the statewide permitting backstop for large withdrawals; Iowa DNR guidance says permits are generally required for withdrawals above 25,000 gallons per day, subject to exemptions Iowa Department of Natural Resources, 2026-06-10.
  • Air emissions: Data center emergency generators or other emissions sources can trigger Iowa DNR air-construction permitting before installation or modification Iowa Department of Natural Resources, 2026-06-10.
  • No statewide moratorium or operating restriction enacted in 2026: HF 2001 would have required water-efficient cooling for new or not-yet-under-construction data centers after January 1, 2027, but it remained in House Commerce; HF 2690 would have required quarterly water and energy reporting plus data-center electric tariffs, but its last action was the filing of House amendments on March 12 and it died on the House calendar Iowa Legislature BillBook, HF 2001, 2026-07-17 Iowa Legislature bill history, HF 2690, 2026-07-16.

Local restrictions / moratoriums

  • Linn County ordinance: On February 18, 2026, Linn County adopted a data-center ordinance for unincorporated areas that requires water-use analysis, a water-use agreement before any land-use approval, an economic-development agreement including a community betterment fund, and site-plan review for utilities, traffic, emergency access, noise, visual buffering, and security Linn County, 2026-07-01.
  • Linn County moratorium supersedes new EU-3 applications: On July 1, the county added an 18-month moratorium on accepting new applications to rezone unincorporated property into the EU-3 Large-Scale Data Center District. It runs through 11:59 p.m. on January 1, 2028 unless ended early, extended, or replaced after the county studies cumulative water, electric, emergency-response, transportation, and regional-infrastructure effects; it does not apply inside cities such as Palo Linn County, 2026-07-01.
  • Google/Palo jurisdiction shift: After Linn County adopted its ordinance, Google changed plans and pursued annexation of its proposed 545-acre, $1 billion-plus Palo-area campus into the City of Palo; the county also stopped work on its water balance study because the study was tied to land-use jurisdiction over the unincorporated site Iowa Public Radio, 2026-03-04.
  • Palo draft ordinance: Palo gave first-reading approval to a data-center zoning ordinance on June 1, then delayed action. The council resumed the process and approved the second reading 4-1 on July 13; a third reading was still required as of July 17 Iowa Public Radio, 2026-06-02 Radio Iowa, 2026-07-14.
  • Dubuque County moratorium: Supervisors voted 2-1 on May 26 for a 12-month pause and on July 6 adopted Resolution 26-151, rescinding the earlier resolution and formally setting the moratorium from May 26, 2026 through May 26, 2027. It covers all data-center sizes and supporting infrastructure in unincorporated Dubuque County while the county conducts a defined planning, infrastructure, utility, environmental, fiscal, and public-engagement process Dubuque County, 2026-07-06 Dubuque County, 2026-07-06.
  • Other county moratoriums adopted in March-May: Adair County unanimously adopted Resolution 2026-26 on March 18, pausing data centers, high-density computing, and battery storage in unincorporated areas until it adopts permanent rules or rescinds the pause; Franklin County adopted an 18-month moratorium on March 31; Audubon County adopted Resolution 2026-27 on May 5 through May 1, 2027; Dickinson County voted 4-1 on May 12 for six months; and Des Moines County adopted a one-year moratorium on May 19 Adair County Board of Supervisors minutes, 2026-03-18 Franklin County Ordinance 2026A, 2026-03-31 Audubon County Board of Supervisors minutes, 2026-05-05 Northwest Iowa Now, 2026-05-15 KBUR, 2026-05-20.
  • Other county moratoriums adopted in June-July: Lee County adopted Resolution 2026-76 on June 16; Plymouth County adopted a one-year pause through June 16, 2027; Sioux County adopted a one-year pause for unincorporated areas; Woodbury County unanimously adopted Resolution 14064 on June 23 for 12 months; and Ida County unanimously adopted an indefinite pause at the end of June Lee County, 2026-06-18 Plymouth County Board of Supervisors, 2026-06-16 KTIV, 2026-06-23 Woodbury County, 2026-06-23 Radio Iowa, 2026-07-13.
  • City votes and ordinance processes: Clinton rejected a moratorium 5-2 on June 9 but presented its first data-center ordinance draft on July 15; after roughly two hours of public comment, the Planning Commission left the hearing open until August, and QTS still had not filed a formal project proposal. Council Bluffs unanimously rejected a proposed 12-month moratorium on June 15 despite wastewater-capacity concerns. Marshalltown’s council voted 5-2 on July 13 to proceed with a four-month pause, but the formal moratorium resolution was scheduled for July 27 and was not yet operative at the cutoff City of Clinton, 2026-06-12 Iowa Public Radio, 2026-07-16 Radio Iowa, 2026-06-18 Times-Republican, 2026-07-14.
  • Jefferson County/Fairfield and Iowa County study processes: Fairfield and Jefferson County launched a community survey after a May 19 joint meeting and were still drafting an ordinance and discussing a moratorium in July. Iowa County supervisors voted June 26 to move forward with the steps needed for a moratorium, but the minutes do not show that a moratorium had yet been enacted Fairfield Area Chamber of Commerce, 2026-05-28 Ottumwa Radio, 2026-07-07 Iowa County Board of Supervisors minutes, 2026-06-26.
  • Ames review and temporary project delay: LightEdge proposed a roughly 100,000-square-foot colocation facility on 10.86 acres of city-owned airport property, beginning at about 3 MW and potentially reaching 25 MW over ten years. After a public listening session, the City Council voted July 14 to delay a project decision while staff develops regulatory recommendations and a public-review roadmap due July 28 City of Ames staff report, 2026-06-23 KCCI, 2026-07-15.
  • Fairfax/Morgan Creek review pressure: KCRG reported in June 2026 that multiple developers had approached Fairfax and Linn County leaders about potential data-center sites near Morgan Creek, adding to neighborhood concern over traffic, road impacts, noise, water, and local cost exposure KCRG, 2026-06-05.
  • Cedar Rapids/Linn County water monitoring: With two data centers under construction in Cedar Rapids, another planned for Palo, and Fairfax reporting developer interest, KCRG reported that Cedar Rapids was drilling a new aquifer-storage well and Linn County was starting a water-monitoring program with 10 monitors in deep bedrock wells and 16 planned monitors in shallow sandy locations along the Cedar and Wapsipinicon Rivers KCRG, 2026-06-09.
  • Central Iowa water context: West Des Moines Water Works reported that Microsoft data centers accounted for 2.4% of its 2025 distribution and that the May 27, 2026 Central Iowa Water Works Stage 2 conservation alert resulted from prolonged high nitrate concentrations reducing treatment capacity—not data-center demand. This does not resolve project-specific peak-demand questions, but corrects claims tying the 2026 alert itself to data centers West Des Moines Water Works, 2026-06-01.

3. Local governance

4. Legislative activity (2024-2026)

5. Notable projects and operators

  • QTS (Cedar Rapids): QTS’s campus is under construction on 612 acres with up to seven buildings. The development agreement requires at least $750 million and 30 jobs for the first two phases; Cedar Rapids now estimates $4.5 billion total investment, while QTS has separately described a $10 billion planned campus, so the public figures differ by source and scope. TAI’s March study, using Cleanview pipeline data, lists 616 MW of planned capacity; that is a third-party estimate rather than a disclosed ICR contract demand. In May, QTS disclosed plans for a temporary modular-generator plant to commission the campus for less than six months, subject to local and aviation permitting City of Cedar Rapids Economic Development, 2026-07-06 Economic Impact Study of Data Centers in Iowa, 2026-03-12 QTS, 2025-08-08 Corridor Business Journal, 2026-05-29.
  • QTS (Clinton exploratory project): QTS is exploring a $10 billion hyperscale campus, but as of July 16 it had not filed a formal proposal and no project-specific MW figure was public. Clinton’s Planning Commission was still drafting the city’s first data-center ordinance Iowa Public Radio, 2026-07-16.
  • Google (Cedar Rapids and Palo area): Cedar Rapids now lists Google’s local project at a $576 million minimum and an estimated $3.5 billion-plus total investment; MISO’s public large-load list identifies the Cedar Rapids Google project at 600 MW. Construction advanced enough for the city to consider temporary occupancy conditions addressing steam-plume and airport-visibility effects in June. Google is also pursuing the 545-acre, $1 billion-plus Palo-area project tied to annexation and the Duane Arnold restart City of Cedar Rapids Economic Development, 2026-07-06 MISO, 2024-12-06 KCRG, 2026-06-22 Iowa Public Radio, 2026-03-04.
  • CLOP Cedar Rapids: CLOP Cedar Rapids, IA, LLC began site work for an approximately 98,700-square-foot data center at 1515 33rd Avenue SW and received a building permit June 22. The industrial-zoned, privately funded project uses closed-loop cooling and received no city incentive, development agreement, rezoning, public hearing, or City Council vote; no public investment or MW figure was located City of Cedar Rapids Economic Development, 2026-07-06.
  • LightEdge (Ames): LightEdge’s early-stage airport proposal would start at approximately 3 MW, grow to about 6 MW, and potentially reach 25 MW over roughly ten years; the City Council delayed a decision July 14 pending a regulatory roadmap City of Ames staff report, 2026-06-23 KCCI, 2026-07-15.
  • Northwest Iowa prospects: Salix annexed roughly 900 acres in April for a possible data center site being assembled through a MidAmerican affiliate, but MidAmerican had not identified an end user and said the eventual customer would pay the full cost of generation, transmission, and substation infrastructure. Near Hull, PathOne and Sunstone proposed repurposing the former Bison Renewable Energy site for a 30,000-50,000-square-foot data center; electricity, water, cooling, and final approvals remained unresolved after Sioux County’s moratorium Iowa Public Radio, 2026-06-17 KTIV, 2026-06-30.
  • Wahawk Power (Waterloo): A previously approved agreement conveyed roughly 12 acres of city land for $1 for an 80,000-square-foot data center with a $6 million minimum assessed value, a 50% property-tax rebate for ten years, and an option for another 10-12 acres. The project drew organized public opposition over water, electricity, noise, transparency, and limited job commitments at the June 1 council meeting; planning approvals were still pending Hottle Real Estate summary of Waterloo development agreement, 2026-02-24 Govly transcript of City of Waterloo meeting, 2026-06-01.
  • Tract / Project West (Norwalk): On March 5, Norwalk approved a development agreement enabling infrastructure and site preparation for a proposed 282-acre, reported $12 billion data-center campus. The action did not approve a final data-center site plan or identify an end user; as of June 29, Tract-owned land was still being prepared and the city said the ultimate operator remained unknown KCCI, 2026-03-06 KNIA/KRLS, 2026-06-29.
  • Microsoft (Van Meter): Van Meter unanimously approved Resolution 2026-25 on March 23 authorizing a development agreement for one or more Microsoft data centers. Microsoft must pay the city’s project-specific infrastructure costs; the agreement did not state a final capital-investment amount, job count, or construction schedule. MISO’s earlier informational large-load list associated the project with 415 MW, but cautioned that the list was not for planning reliance City of Van Meter, 2026-04-13 MISO, 2024-12-06.
  • Central Iowa Microsoft/Edged pipeline inventory: TAI’s March study, drawing on Cleanview, lists Microsoft Ginger East at 444 MW with 2027 operations planned, Ginger West at 207 MW with 2026 operations planned, Ruthenium at 113 MW with 2026 operations planned, and Edged Des Moines at 13 MW with 2027 operations planned. These are third-party pipeline estimates rather than final utility-service commitments Economic Impact Study of Data Centers in Iowa, 2026-03-12.
  • Additional Alliant-contracted Iowa loads: Alliant announced on April 30, 2026, that it had signed an approximately 370 MW electric service agreement for an Iowa data center, raising total contracted data-center demand to approximately 3.4 GW; Alliant’s May 2026 investor slides separately identify a QTS 2 data center in Iowa and a 370 MW data center in Iowa and say Iowa individual-customer-rate filings for QTS 2 and the 370 MW contract were expected Alliant Energy, 2026-04-30 Alliant Energy AGA slides, 2026-05-17.
  • Duane Arnold / Google power supply: NextEra’s Duane Arnold restart plan targets a 615 MW nuclear unit returning to service before the end of 2029, with local reporting that Google is expected to take roughly 565 MW under a 25-year agreement NextEra Energy, 2025-10-27 Iowa Public Radio, 2026-04-29.
  • Microsoft (West Des Moines): Microsoft remains a major West Des Moines operator; a Chamber page lists three facilities with $21 million in FY 2024-25 annual property taxes and major project-linked infrastructure. In April, Microsoft said its Maia 200 AI accelerator was live in Iowa and Arizona data centers, confirming continued deployment into its existing Iowa footprint West Des Moines Chamber of Commerce, 2026-06-10 Microsoft, 2026-04-23.
  • Apple (Waukee): Apple’s previously announced Waukee project remains part of Iowa’s historical data-center landscape, with a $1.3 billion planned investment and a $100 million public improvement fund announced in 2017 Apple, 2017-08-24.
  • Meta (Altoona): Meta’s Altoona data center remains one of Iowa’s established hyperscale campuses Meta Altoona data center info sheet, 2026-06-10.
  • Google (Council Bluffs): Google’s Council Bluffs campus remains the state’s longest-running Google data-center presence Google Data Centers, 2026-06-10.

February 1-July 17, 2026 bottom line