NC — State Policy Updated 2026-07-17

North Carolina

State sales & use tax exemptions 2026 incentive and tax-policy proposals Local incentives Active/proposed moratoriums Zoning restrictions / by-right vs conditional use Environmental constraints Noise and other performance standards

1) Incentive programs

State sales & use tax exemptions (data center-specific)

  • Eligible Internet datacenter exemption (sales/use tax): North Carolina continues to exempt eligible business property used at an eligible Internet datacenter under G.S. 105-164.13(55), including cooling, power infrastructure, and property used for related computer engineering/science research. Session Law 2026-41 removed electricity from this exemption, and Session Law 2026-42 made the repeal apply beginning with the first billing period that is at least 30 days after enactment. Sources: NC General Assembly, Session Law 2026-41, 2026-07-07 and NC General Assembly, Session Law 2026-42, 2026-07-07.
  • Eligible Internet datacenter definition & thresholds: An “eligible Internet datacenter” must be primarily used by NAICS 511210 or 519130, be on a single or contiguous parcel, be in an enterprise tier 1-3 or development tier 1-2 county at the time of application, and have a Secretary of Commerce written determination of $250M+ private investment in real and eligible business property within 5 years after construction starts. Source: NC General Assembly, accessed 2026-06-10.
  • Qualifying datacenter exemption (sales/use tax): North Carolina continues to exempt datacenter support equipment used at a qualifying datacenter under G.S. 105-164.13(55a), but Session Law 2026-41 removed electricity from this exemption on the same delayed-billing schedule established by Session Law 2026-42. Sources: NC General Assembly, Session Law 2026-41, 2026-07-07 and NC General Assembly, Session Law 2026-42, 2026-07-07.
  • Qualifying datacenter definition & thresholds: A “qualifying datacenter” must meet the county wage standard, receive a Secretary of Commerce written determination that $75M+ private investment will be made in real or tangible property within 5 years of the first investment, and provide health insurance for all full-time employees with the employer paying at least 50% of premiums meeting minimum plan standards. Source: NC General Assembly, accessed 2026-06-10.
  • Effective date: Session Law 2015-259 made the qualifying datacenter sales/use tax exemption effective January 1, 2016 for sales made on or after that date. Source: NC Department of Revenue / Session Law 2015-259, 2015-09-18.
  • Job creation & clean energy conditions: The statutory definitions and exemptions for eligible Internet datacenters and qualifying datacenters do not list a minimum job-count requirement or any renewable/clean energy condition; requirements focus on investment, wage standard, and benefits for qualifying datacenters. Sources: NC General Assembly, accessed 2026-06-10 and NC General Assembly, accessed 2026-06-10.
  • Sunset dates: The codified statutes for these exemptions do not specify a sunset date. Source: NC General Assembly, accessed 2026-06-10.
  • Franchise tax relief / investment tax credits: The data-center-specific incentives codified in G.S. 105-164.13 focus on sales/use tax exemptions and do not include franchise tax relief or investment tax credits within these sections. Source: NC General Assembly, accessed 2026-06-10.
  • Privilege tax transition (historical, still relevant context): Session Law 2015-259 moved qualifying datacenter treatment into the current sales/use tax exemption framework effective January 1, 2016, replacing the older transitional privilege-tax structure for qualifying datacenter machinery and equipment. Source: NC Department of Revenue / Session Law 2015-259, 2015-09-18.

2026 incentive and tax-policy proposals

  • Governor and Commerce review of exemptions: In April-May 2026, Governor Josh Stein and legislative leaders called for review or rollback of data center sales and use tax exemptions after a Commerce memo estimated current annual foregone state revenue at $45M-$57M, construction-phase exemptions for planned data centers at $1.5B-$2.3B, and annual exemptions of up to roughly $450M if all planned data centers are built. Sources: NC Department of Commerce, 2026-04-06 and WUNC, 2026-05-08.
  • Enacted partial repeal - SB257 / Session Law 2026-41: Governor Stein signed the 2026 budget on July 7. Section 44.4 repealed the sales/use tax exemption for data-center electricity, but preserved the eligible-business-property and datacenter-support-equipment exemptions. Legislative fiscal staff estimated $21.4M in additional General Fund revenue in FY 2026-27 and $23.1M in FY 2027-28; electricity will become subject to the 7% combined general rate on the delayed billing schedule described above. Sources: Governor of North Carolina, 2026-07-07, NC General Assembly, Session Law 2026-41, 2026-07-07, and NC General Assembly Fiscal Research Division, 2026-07-01.
  • HB1180 - Data Center Amendments: HB1180 would go beyond the enacted electricity-only repeal by repealing the principal equipment exemptions effective January 1, 2027 and requiring an NCUC-approved tariff for large-load data centers over 20 MW; it remained in House Rules as of July 17. Sources: NC General Assembly bill page, accessed 2026-07-17 and NC General Assembly bill text, 2026-05-04.
  • HB1189 - Datacenter Transparency Act: HB1189 would impose a statewide permitting moratorium from August 1, 2026 through August 1, 2028, direct a Collaboratory study, and require annual exemption reporting; it remained in House Rules as of July 17. Sources: NC General Assembly bill page, accessed 2026-07-17 and NC General Assembly bill text, 2026-05-05.
  • HB1213 no longer addresses data centers: The filed version would have repealed the data-center exemptions, but the favorable committee substitute reported June 30 removed every data-center provision. Edition 2 instead addresses an 80% property-tax exclusion for future solar energy systems and was referred to House Energy and Public Utilities; it had not passed the House as of July 17. Sources: NC General Assembly bill page, accessed 2026-07-17 and NC General Assembly Edition 2, 2026-06-30.
  • HB1063 - Ratepayer and Resource Protection Act: Filed April 28, HB1063 proposed a separate large-data-center regime requiring at least 25% on-site clean generation, special high-capacity rates recovering the full marginal cost of service, closed-loop or reclaimed-water cooling, annual energy/water reporting, and repeal of data-center sales-tax exemptions beginning January 1, 2027. It received no action after referral to House Rules. Sources: NC General Assembly bill page, accessed 2026-07-17 and NC General Assembly bill text, 2026-04-28.
  • Legislative leadership support for rollback: Reporting after the May 2026 bill filings said House Speaker Destin Hall and Senate leader Phil Berger supported rolling back or revisiting data center sales-tax exemptions, including the exemption for electricity. Source: WUNC, 2026-05-08.

Local incentives (property tax rebates / grants)

  • Local grants/abatement authority: Counties and cities may make appropriations for economic development under G.S. 158-7.1, which is the statutory basis for local incentive agreements often structured as performance-based grants tied to tax receipts. Source: NC General Assembly, accessed 2026-06-10.
  • Example (Richmond County - Amazon): Richmond County approved incentives tied to property tax reimbursements for Amazon’s Richmond County data center/AI campus, including potential 20-year grants tied to job creation and investment benchmarks. Source: Associated Press, 2025-06-04.
  • Example (Catawba County - Microsoft): Local governments approved performance-based incentive grants for Microsoft’s Catawba County project, including grants tied to real and personal property investment over ten years, with potential extensions tied to additional investment. Source: Catawba County EDC, 2023-12-14.
  • Microsoft incentive-agreement revision announced: Catawba County EDC and its municipal partners said June 23 that the local Microsoft agreements were being amended so the sites would pay property taxes on the full value of buildings, equipment, and infrastructure. The statement describes an amendment in progress, not a published final amended agreement. Source: Catawba County EDC, 2026-06-23.
  • Pending local-incentive restriction in SB730: The June 3 engrossed version would bar local governments from granting G.S. 158-7.1 incentives for data centers lacking prior approvals or permits. After the Senate received the House committee substitute, the bill was referred to Senate Rules on June 8 and remained pending there on July 17. Sources: NC General Assembly bill page, accessed 2026-07-17 and NC General Assembly bill text, 2026-06-03.

2) Restrictions and moratoriums

Active/proposed moratoriums

  • Gates County temporary moratorium (local): Gates County adopted a one-year temporary moratorium on approving development approvals for data centers, cryptocurrency mining, or other high-impact data processing facilities in unincorporated areas, pausing special use permits, conditional use permits, rezonings, building permits, and related approvals during the moratorium period. Source: Gates County, 2025-12.
  • Chatham County moratorium: Chatham County commissioners approved a one-year moratorium on data-center and cryptocurrency-mining construction on February 11, lasting until February 11, 2027 unless replacement regulations take effect sooner. Source: Chatham County, 2026-02-12.
  • Orange County moratorium: On April 21, 2026, the Orange County Board of Commissioners voted 6-0 to approve a one-year moratorium on large-scale data centers, including AI data centers, cryptocurrency mining facilities, data processing facilities, and similar large-scale operations, while county staff prepare ordinance amendments. Source: Orange County, 2026-04-21.
  • Durham moratorium extended: Durham’s initial 60-day May pause was extended by ten months on June 15, creating an approximately one-year moratorium while the city develops regulations. Sources: City of Durham, 2026-05-04 and City of Durham meeting record, 2026-06-15.
  • Charlotte moratorium: On June 8, 2026, Charlotte City Council adopted a 150-day moratorium on accepting applications for new data centers; complete applications and projects approved before June 8 can proceed, and the moratorium is scheduled to expire November 5, 2026. Source: City of Charlotte, 2026-06-08.
  • Wendell moratorium: Wendell initiated a public hearing process in March 2026 because its Unified Development Ordinance did not clearly define data centers, data processing facilities, or cryptocurrency mining; local reporting says commissioners approved a moratorium through December 31, 2026. Sources: Town of Wendell, 2026-03-23 and WRAL, 2026-04-24.
  • Apex temporary suspension: Apex leaders voted for a temporary one-year suspension of proposed data center development after a Natelli Communities proposal for a data center was dropped. Source: WRAL, 2026-04-24.
  • Harnett County moratorium activity: Harnett County posted Ordinance 2026-17 extending its moratorium on data centers, cryptocurrency mining facilities, and similar uses. Source: Harnett County Ordinance 2026-17, 2026-05.
  • Cumberland County enacted; Fayetteville pending: Cumberland County commissioners voted 7-0 on June 15 for a six-month moratorium in unincorporated areas, through December 15. Fayetteville postponed its own action, with an August 10 hearing and August 25 decision then scheduled. Source: CityView, 2026-06-16.
  • Additional 2026 local pauses: Northampton County adopted a 32-month pause on May 4; Holly Springs adopted a pause of up to 12 months on June 16; Rowan County adopted a one-year moratorium on new projects while grandfathering Edged Energy’s 400-acre development; Hillsborough adopted a two-month pause; and Boiling Spring Lakes adopted a one-year pause. Sources: North Carolina Health News, 2026-05-08, Town of Holly Springs, 2026-06-17, and Carolina Public Press, 2026-06-11.
  • Davie and Stokes County July outcomes: Davie County unanimously adopted a one-year moratorium on July 6. In Stokes County, the planning board recommended a six-month moratorium, but county commissioners rejected it 3-2 on July 13, allowing review of Project Delta to continue. Sources: WUNC/WFDD, 2026-07-07, Southern Coalition for Social Justice, 2026-07-10, and WXII, 2026-07-14.
  • Edgecombe proposal withdrawn; moratorium proposed: Essential Services Solutions withdrew its Kingsboro data-center proposal in early July. Edgecombe commissioners then called for an August public hearing on a proposed 24-month moratorium; no moratorium was yet in force on July 17. Sources: Data Center Dynamics, 2026-07-15 and North Carolina Health News, 2026-07-14.
  • Western North Carolina and Surry actions: Canton adopted a 12-month moratorium February 11; Kings Mountain adopted a six-month pause February 24; Boone adopted a one-year pause March 23; Swain County adopted a 12-month pause April 21; the Eastern Band of Cherokee Indians adopted an indefinite moratorium May 7; Surry County adopted a 60-day pause June 1; and Franklin adopted a one-year pause July 6. Sources: WUNC, 2026-02-12, WFAE, 2026-02-26, WUNC, 2026-03-23, BPR, 2026-04-22, WUNC/BPR, 2026-05-07, WUNC/WFDD, 2026-06-03, and Macon Sense, 2026-07-07.

Zoning restrictions / by-right vs conditional use

  • Local zoning control (state enabling law): Under Chapter 160D, local governments may adopt zoning regulations that regulate the location and use of buildings, structures, and land, which is the state legal basis for local by-right, conditional-use, special-use, and performance-standard decisions for data centers unless the General Assembly enacts a specific preemption. Source: NC General Assembly, accessed 2026-06-10.
  • Example of local zoning process for data centers: Gates County’s moratorium pauses special use permits, conditional use permits, zoning map amendments, and building permits for data centers, indicating that approval in that county generally requires local zoning actions rather than statewide by-right authorization. Source: Gates County, 2025-12.
  • Lee County and Sanford performance standards: In April 2026, Lee County added “Data Center” to its Unified Development Ordinance with standards requiring a pre-application meeting, noise study, and water/wastewater/electric confirmation notices; Sanford adopted a similar amendment the next day. Source: WRAL, 2026-04-24.
  • Johnston County rezoning condition: Johnston County approved a Prologis heavy-industrial rezoning in Cleveland Township after the company agreed not to pursue a data center at the site. Source: WRAL, 2026-04-24.
  • Vance County rezoning: Vance County commissioners approved an April 20, 2026 rezoning of land that could be used for a data center, though developer Natelli Investments had not confirmed a data center use at the time of local reporting. Source: WRAL, 2026-04-24.
  • Salisbury standards and Flexential project: Salisbury adopted a June 2 text amendment allowing data-center applications subject to limits on size, noise, and water use, enabling the proposed Flexential project to advance while neighboring Rowan County’s moratorium applies only to new county-jurisdiction projects. Source: Carolina Public Press, 2026-06-11.
  • Project Iron Spur (Forsyth/Rural Hall): The Winston-Salem/Forsyth planning board recommended denial of rezoning case F-1669 by 7-2 on June 11. Rural Hall’s council then reversed its opposition and supported the project 3-1 on June 22; the final county hearing was scheduled for July 30, so no final rezoning decision had occurred by July 17. Source: Rural Hall community document repository, updated 2026-07-14.
  • Project Delta rezoning litigation (Stokes County): Community groups and residents sued in March to invalidate the rezoning of more than 1,800 acres along the Dan River for Project Delta, alleging procedural and evidentiary defects. The lawsuit remained pending while county commissioners rejected a separate moratorium proposal in July. Source: North Carolina Health News, 2026-03-25.

Environmental constraints (state-level)

  • Water withdrawal registration: Any person withdrawing 100,000 gallons/day or more of surface or groundwater must register the withdrawal or transfer with the state. Source: NC General Assembly, accessed 2026-06-10.
  • Water use reporting requirements: The NC DEQ water use reporting program reiterates the 100,000 gpd non-agricultural threshold and annual reporting requirements for registrants. Source: NC DEQ, accessed 2026-06-10.
  • Capacity use areas (groundwater permits in CCPCUA): The Central Coastal Plain Capacity Use Area requires groundwater permits for users withdrawing more than 100,000 gpd and applies to 15 counties; this can affect data centers with large groundwater withdrawals in those counties. Source: NC DEQ, accessed 2026-06-10.
  • Air emissions permits: Stationary sources that emit air contaminants, including backup generation where not exempt, generally require permits before construction and operation under G.S. 143-215.108. Source: NC General Assembly, accessed 2026-06-10.
  • Air quality permitting and emergency generators: NC DEQ lists emergency generators among source types eligible for general air quality permits, indicating permitting applies to such sources. Source: NC DEQ, accessed 2026-06-10.
  • Pending state data-center water standards: SB730 would require applicants to attest to closed-loop water or liquid cooling and direct DEQ to adopt standards, including a prohibition on evaporative cooling. Those provisions remained pending in Senate Rules on July 17. Sources: NC General Assembly bill page, accessed 2026-07-17 and NC General Assembly bill text, 2026-06-03.
  • Richmond County Amazon/Duke air permits: DEQ issued draft determinations for a joint July 30 hearing on Amazon’s Energy Way Tech Campus and Duke’s temporary bridge-power facility. Duke proposed 57 diesel engines to retire within one year after operation, while Amazon proposed 588 diesel emergency engines that would remain as backup; both applications require Title V permits and were not finally decided by July 17. Source: NC Department of Environmental Quality, 2026-06-26.

Noise and other performance standards (local)

3) Local governance & preemption

4) Legislative activity (2024-2026)

5) Notable projects and operators in North Carolina

Major announced / operating projects

  • Amazon (AWS) - Richmond County AI / cloud campus: Announced $10B investment and 500+ jobs for a new data center/AI infrastructure campus in Richmond County. Source: Governor Josh Stein, 2025-06-04.
  • Amazon permit status: Amazon’s Richmond County campus remained in air permitting on July 17, with draft Amazon and Duke bridge-power permits scheduled for a joint July 30 hearing. Source: NC Department of Environmental Quality, 2026-06-26.
  • Google - Lenoir (Caldwell County): Google announced a new $1B investment over two years to expand its Lenoir data-center infrastructure, on top of its longstanding operations there. Source: City of Lenoir, 2026-03-13.
  • Microsoft - Catawba County: Microsoft announced a $1B minimum investment to develop four data centers in Catawba County over 10 years, with at least 50 jobs. Source: Catawba County EDC, 2023-12-14.
  • Microsoft - Catawba County construction status: Microsoft’s May update reported underground utilities and foundation work underway at the Hickory/Stover site, with steel installation planned for late June. Source: Microsoft Local, 2026-05.
  • Microsoft - Person County: Microsoft published a May 2026 update stating it is planning a datacenter campus in Person County, is in the planning phase with early site preparation underway, and expects road work related to the permanent closure of Country Club Road to continue until late summer 2026. Source: Microsoft Local, 2026-05-01.
  • Person County site acquisition and permitting context: Local reporting says Microsoft paid $26.85M in 2024 for a 1,385-acre Person County megasite and expected permitting activity in 2026, while county officials said Microsoft would “pay its own way” and invest in local IT training and nonprofits. Source: WRAL, 2026-04-24.
  • Statewide pipeline: Commerce estimated North Carolina had 60 data centers and a planned data center pipeline of roughly 6.3 GW when it prepared its April 2026 fiscal memo. Source: NC Department of Commerce, 2026-04-06.
  • New Hill Digital Campus withdrawn (Apex/Wake County): Natelli withdrew annexation and rezoning applications for its proposed 300 MW campus on March 5 while Apex considered new zoning rules; the developer left open a possible future refiling. Source: WUNC, 2026-03-05.
  • Kingsboro/Edgecombe proposal withdrawn: Essential Services Solutions withdrew the proposed Kingsboro AI data center in early July; reports had described an initial 300 MW, $19.2B proposal. Source: Data Center Dynamics, 2026-07-15.
  • WhiteFiber NC-1 - Madison/Rockingham County status: WhiteFiber’s May project page described a 96-acre, roughly 970,000-square-foot AI/HPC campus with 24 MW operational/near-term power, 99 MW secured, and a conditional path to 200 MW. The company reported a $45M acquisition, projected investment above $1B if power, financing, and execution milestones occur, and more than 60 jobs. Source: WhiteFiber, last updated 2026-05.