Overview
Nevada offers generous tax abatements to attract data centers, with 10- or 20-year packages that reduce personal property tax by 75% and sales tax to 2%. The Governor’s Office of Economic Development (GOED) administers these incentives under strict job-creation and capital-investment thresholds. In the Reno/Truckee Meadows area, local debates about water rights and grid capacity have led to calls for a development pause while permanent rules are crafted.
Incentives
Data Center Tax Abatements (NRS 360.754)
Nevada provides partial abatements for personal property tax and sales/use tax to new or expanded data centers through GOED.[1][2]
Abatement structure:
- 75% personal property tax abatement for 10 or 20 years
- Sales/use tax reduced to 2% for 10 or 20 years (requires two-thirds GOED Board vote for sales component)
Minimum thresholds:
- 10-year abatement: $25M capital investment, 10 full-time Nevada-resident employees, average wages at or above statewide average, health insurance provided
- 20-year abatement: $100M capital investment, 50 full-time Nevada-resident employees, average wages at or above statewide average, health insurance provided
- All thresholds must be met within 5 years of abatement approval[2]
Colocated tenants:
- Tenants qualify if they sign a minimum two-year contract and obtain a Nevada business license
- Tenant abatements cannot exceed the host data center’s rate or term[1][2]
Requirements and Conditions
Operational Commitment
Data centers must continue operating in Nevada for at least 10 years after the abatement takes effect. This commitment binds successors and assigns.[2]
Construction Workforce Requirement
At least 50% of construction workers must be Nevada residents, unless GOED grants a waiver due to insufficient qualified local labor.[2]
Wage and Health Insurance Standards
Qualifying facilities must pay average wages at or above the statewide average and provide health insurance meeting GOED minimum standards.[2]
Public Notice and Local Acknowledgment
GOED cannot act on an abatement application without public notice and a public meeting. The agency must request acknowledgment letters from affected counties, school districts, and cities/towns.[2][3]
Recapture Provision
If a data center fails to meet statutory requirements or ceases operation before the agreed term, it must repay abated taxes with interest, unless the Nevada Tax Commission finds substantial compliance.[2]
Sunset Clause
GOED cannot approve abatement applications received on or after January 1, 2036.[2]
Water and Environmental Rules
Reno / Truckee Meadows Water Authority (TMWA)
The Truckee Meadows Water Authority requires new developments—including data centers—to acquire water rights on the open market and dedicate them to TMWA, plus provide an additional 11% for drought reserves. Developers must also pay hookup fees and cover new infrastructure costs tied to their projects.[4]
Local Zoning
Reno City Council Proceedings (2025)
In early 2025, the Reno City Council approved the Oppidan Data Center after the planning commission initially denied it. The debate centered on how to regulate data centers given their energy and water impacts. Local environmental advocates have called for a pause in data center development while the city defines permanent rules.[4]
What to Watch
- Reno municipal code updates: Watch for data center-specific zoning, design standards, or conditional use permit requirements as the city formalizes its approach.
- Storey and Washoe County rules: Monitor whether these counties adopt data center-specific industrial siting or conditional use requirements.
- Water rights policy: Track whether TMWA or state agencies adjust drought reserve or dedication requirements in response to increased data center load.
Sources
[1] Governor’s Office of Economic Development (Nevada), “Nevada Data Center Tax Abatements (NRS 360.754),” updated August 2025, https://goed.nv.gov/wp-content/uploads/2025/08/Data-Center-2026.pdf (accessed January 8, 2026).
[2] Nevada Legislature, “NRS 360.754 – Partial abatement of certain taxes imposed on new or expanded data center,” NRS 360 (current through 2025), https://www.leg.state.nv.us/NRS/NRS-360.html#NRS360Sec754 (accessed January 8, 2026).
[3] Nevada Legislature, “NRS 360.757 – Notice and meeting required for Office of Economic Development to take action on any application for abatement,” NRS 360 (current through 2025), https://www.leg.state.nv.us/NRS/NRS-360.html#NRS360Sec757 (accessed January 8, 2026).
[4] Richard Bednarski, “Data Centers: Economic benefit or environmental boondoggle?,” Sierra Nevada Ally, April 13, 2025, https://sierranevadaally.org/2025/04/13/data-centers-economic-benefit-or-environmental-boondoggle/ (accessed January 8, 2026).