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NC — State Policy Updated January 2026

North Carolina

State incentives, regulatory constraints, and local siting dynamics that shape data center development.

Job Development Investment Grant Local Economic Development Assistance Job and investment recapture provisions Utility rate regulation Air quality permits for generators Utility Regulation

Overview

North Carolina courts data centers with job-creation grants and local economic development tools but maintains active utility rate regulation and environmental permitting. The state’s Public Utilities Commission oversees large-load service and rates, while air quality rules govern backup generator installations. Local zoning approvals remain a critical gatekeeping step, as the withdrawn Mooresville proposal demonstrates.

Incentives

Job Development Investment Grant (JDIG)

The JDIG program provides grants to projects that create net new jobs and capital investment in North Carolina.[1]

  • The Economic Investment Committee must find the project benefits the state, aligns with state and local economic goals, and requires a grant to choose North Carolina over another site.[1]
  • Annual award caps and geographic limits apply, with exceptions for large-scale projects.[1]

Local Economic Development Assistance

Counties and cities may fund economic development activities including land acquisition, site preparation, and utility extensions for industrial or commercial projects.[2]

  • Public hearings and notice are required for appropriations involving land or site improvements.[2]
  • Economic development agreements must include recapture provisions if job or investment commitments are missed.[2]

Requirements and Conditions

Sales and Use Tax Datacenter Definition

North Carolina’s sales and use tax statute defines a “datacenter” based on redundant, concurrently maintainable power and cooling systems and multiple distribution paths.[3] This definition sets the baseline for any tax treatment that references datacenters in state law.

Job and Investment Recapture

Any economic development agreement under local assistance statutes must include provisions to recover public funds if the company fails to meet job creation or investment commitments.[2]

Utility and Grid Rules

The North Carolina Utilities Commission (NCUC) regulates utility rates, service, and expansion to ensure just and reasonable rates and reliable service under the Public Utilities Act.[4] Large-load data center service and any special rate arrangements must fit within this regulatory framework. The Commission reviews requests for new service or changes to existing tariffs to ensure they do not shift costs unfairly to other ratepayers.

Water and Environmental Rules

Air Quality Permitting

The NC Department of Environmental Quality Air Quality Division requires permits for stationary sources, including diesel backup generators commonly installed at data centers.[5] Facilities must demonstrate compliance with state and federal air quality standards.

Construction Stormwater and Erosion Control

Land-disturbing construction activities must comply with the state’s construction stormwater program and related permits.[6] Large data center campuses often require extensive grading and stormwater controls subject to this regulatory framework.

Local Zoning

In Mooresville, a proposed Tract data center campus withdrew its rezoning request after community opposition centered on water and electricity usage and local land-use impacts.[7] The episode highlights how local zoning approvals and public hearings can slow or block large data center projects even when state incentives exist.[2][7]

What to Watch

  • NCUC proceedings on large-load tariffs or special rate structures for data centers — any utility requests for new service arrangements will be subject to public review.
  • Local zoning disputes in communities facing data center proposals, particularly in water-constrained areas or near residential neighborhoods.
  • Expansion of JDIG eligibility or changes to local economic development statutes that may adjust job-creation thresholds or recapture terms.

Sources

[1] North Carolina General Assembly, ”§ 143B-437.52. Job Development Investment Grant Program,” North Carolina General Statutes, https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_143B/GS_143B-437.52.html (accessed January 8, 2026).

[2] North Carolina General Assembly, ”§ 158-7.1. Local development,” North Carolina General Statutes, https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_158/GS_158-7.1.html (accessed January 8, 2026).

[3] North Carolina General Assembly, ”§ 105-164.3. Definitions (Datacenter),” North Carolina General Statutes, https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_105/GS_105-164.3.html (accessed January 8, 2026).

[4] North Carolina General Assembly, ”§ 62-2. Declaration of policy,” North Carolina General Statutes, https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_62/GS_62-2.html (accessed January 8, 2026).

[5] North Carolina Department of Environmental Quality, “Air Quality Permitting,” https://www.deq.nc.gov/about/divisions/air-quality/air-quality-permitting (accessed January 8, 2026).

[6] North Carolina Department of Environmental Quality, “Construction Stormwater,” https://www.deq.nc.gov/about/divisions/energy-mineral-and-land-resources/stormwater/construction-stormwater (accessed January 8, 2026).

[7] Bracey Harris, “Data center developer backs off plans for Dale Earnhardt widow’s property in North Carolina,” NBC News, August 13, 2025, https://www.nbcnews.com/news/us-news/dale-earnhardt-widow-data-center-backs-off-mooresville-north-carolina-rcna224827 (accessed January 8, 2026).