Arizona Governor Seeks to End Data Center Sales Tax Exemption

Arizona Gov. Katie Hobbs proposed ending a tax break for data centers and reiterated a plan to incorporate some parts of the 2025 federal tax law into the state tax code.

Hobbs (D) said in her State of the State address to the Republican-controlled legislature Monday that her forthcoming budget proposal will seek to eliminate a sales tax exemption enjoyed by the state’s data center industry.

The tax break, approved in 2013, costs the state $38 million annually in lost revenue, Hobbs said in her speech.

Calling affordability her top priority, Hobbs also asked lawmakers to pass ...