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Regbase

The Data Center Divide

Barbour County

For Barbour County, see Alabama’s statewide laws and regulations below. No additional county-specific measures are listed in our research.

Slightly Anti-Data Center Policies

Alabama allows data centers to receive tax abatements, but limits some benefits for large facilities, including ending certain state abatements once centers of at least 100 megawatts operate. Centers using at least 150 megawatts must meet utility cost and customer-benefit criteria; city zoning and environmental permits may also apply.

Incentives

Tax benefits
5

Extends the data-processing-center tax-abatement program's sunset date and authorizes qualifying private users to receive an additional 10 years of abatement through a binding local-investment agreement. These tax benefits qualify despite the bill's other restrictions; required private community investments are not separate government-funded incentives.

Alabama HB399 (2026)

Eligible data processing center applicants benefit from an extension of the tax-abatement application sunset to July 31, 2032; the bill also restricts future abatement periods.

Alabama SB 265 (2026)

Provides a tax-abatement framework for eligible industrial investment, including data processing centers, with investment-dependent exemption periods for private users.

Alabama Code Chapter 9B, Title 40

Authorizes tax abatements for new and expanding qualifying projects, including eligible data processing centers, on qualifying sales/use, property, and mortgage/recording taxes.

Alabama Chapter 9B (Tax Incentive Reform Act of 1992, as amended)

Chapter 9B authorizes tax abatements for new and expanding qualifying projects, including eligible data processing centers, covering qualifying sales/use, property, and mortgage/recording taxes.

Alabama Code § 40-9B-1 et seq. (Tax Incentive Reform Act of 1992)

current law · Statewide
Limits and reshapes Alabama tax abatements for data processing centers, with the changes generally applying to abatements granted on or after January 1, 2027.Alabama HB399 (2026)

What this means

The bill keeps long abatements—up to 30 years with approved local investments—but adds meaningful costs for new large centers: those with 100 MW or more generally lose state property-tax abatements once operating, and some construction-related tax breaks are limited. Existing project incentives and expansions receive a 10-year protection, so the overall effect is a moderate setback rather than a ban.

People behind it

  • Bill sponsor; listed as a sponsoring representative.

  • Bill sponsor; listed as a sponsoring representative.

  • Bill sponsor; listed as a sponsoring representative.

Show 15 more peopleShow fewer people

  • Bill sponsor; listed as a sponsoring representative.

  • Bill sponsor; listed as a sponsoring representative.

  • Bill sponsor; listed as a sponsoring representative.

  • Bill sponsor; listed as a sponsoring representative.

  • Bill sponsor; listed as a sponsoring representative.

  • Bill sponsor; listed as a sponsoring representative.

  • Bill sponsor; listed as a sponsoring representative.

  • Bill sponsor; listed as a sponsoring representative.

  • Bill sponsor; listed as a sponsoring representative.

  • Bill sponsor; listed as a sponsoring representative.

  • Enacted the measure.

  • Responsible for approving certain agreements and administering tax-abatement procedures.

  • Responsible for approving certain agreements and administering economic-development provisions.

  • Authorized to abate state construction-related transaction taxes for qualifying data processing centers in targeted counties.

  • Responsible for annually adjusting the state parks allocation under the amended sales-tax distribution provision.

Restrictions & requirementsHide restrictions & requirements6

  • To qualify as a data processing center for the tax-abatement program, an establishment must have at least 20 new jobs, with average annual total compensation including benefits of at least $40,000 per job. 20 new jobs

  • For abatements granted on or after January 1, 2027, the maximum exemption period for a data center is generally 10 years when aggregate investment does not exceed $200 million and 20 years when investment exceeds $200 million. An additional 10 years, for a maximum of 30 years, is available only if the investment thresholds are met and the operator enters into an approved binding agreement for qualified local investments; failure to meet that agreement revokes the extra 10 years and requires repayment of taxes abated during the extension. additional 10 years of abatement

  • An abatement ends if the property ceases to be used in the active conduct of an industrial or research enterprise for six consecutive months. six consecutive months

  • For an abatement granted on or after January 1, 2027, to a data center with total peak demand of at least 100 megawatts, the state noneducational ad valorem tax abatement may not continue after the private-use industrial property is placed in service. 100 megawatts or greater

  • For a data center meeting the 100-megawatt threshold, state construction-related sales and use tax abatements granted on or after January 1, 2027, generally end when the property is placed in service for building materials, fixtures, structural components, real-property improvements, power infrastructure, backup generation systems, and battery systems. Computers, servers, software, computing and networking equipment, cooling systems, and similar operating equipment may remain eligible throughout the maximum exemption period. The Governor may allow the state construction-tax abatement for the full period if the center is located in a targeted county. no abatement of state construction related transaction taxes

  • Incentives under Act 2012-210 are unavailable to any company filing an application after July 31, 2032; projects receiving an incentive before that date remain entitled to it under their project agreement. filing an application after July 31, 20282032

Benefits & exceptionsHide benefits & exceptions11

  • A data processing center qualifies as an industrial or research enterprise eligible for Alabama tax abatements if it has at least 20 new jobs, average annual compensation of at least $40,000 including benefits, and performs qualifying data-processing, hosting, storage, backup, or related activities. not less than 20 new jobs

  • Eligible data centers may receive abatements of noneducational ad valorem taxes, construction-related transaction taxes, and mortgage and recording taxes, subject to the statute's approval procedures and limits. may be abated with respect to private use industrial property

  • For a data center, the abatements can cover property acquired during the applicable exemption period, including computers, licensed software, computing and networking equipment, storage equipment, cooling systems, substations, backup generators, battery systems, and other equipment needed to maintain and operate the center. all real and personal property comprising a data processing center

  • For abatements granted on or after January 1, 2027, a data center with more than $200 million in aggregate capital investment within 10 years may receive a 20-year exemption period. a period of 20 years

  • A data center qualifying for the capital-investment thresholds may obtain an additional 10 years, for a maximum 30-year abatement, by entering into a binding agreement approved by the Department of Revenue, Department of Commerce, and affected local governing body to make specified infrastructure, broadband, water, wastewater, or education investments benefiting the community. may qualify for an additional 10 years of abatement

  • If the private user fails to meet a material obligation in the community-investment agreement, the additional 10-year period is revoked, the exemption reverts to 20 years, and abated state taxes from the extended period must be repaid with interest. the additional 10-year abatement authorized

  • For data centers with total peak demand of at least 100 megawatts, computers, servers, licensed software, computing and networking equipment, storage equipment, cooling systems, and other operational equipment remain eligible for abatement of state construction-related transaction taxes throughout the applicable maximum exemption period. shall be eligible for abatement throughout the applicable maximum exemption period

  • The Governor may abate state construction-related transaction taxes for the maximum exemption period for a data center with peak demand of at least 100 megawatts if it is located in a targeted county. the Governor may abate the state construction related transaction taxes for the maximum exemption period

  • A data center does not need an inducement agreement, resolution, letter, or other official inducement action to apply for, receive, or obtain an otherwise authorized tax abatement. neither an inducement nor a request for inducement shall be required

  • Existing project incentives are protected: the amendments do not apply to incentives in projects executed before the act's effective date, or to expansions of those projects during the following 10 years. shall not apply to any incentive that is part of a project executed before the effective date

  • The availability of incentives under Act 2012-210 is extended through July 31, 2032; projects receiving an incentive before that date remain entitled to it under their project agreement even if the act is not reauthorized. No incentive provided in Act 2012-210 be available

Sources

current law · Statewide
Establishes standards for Public Service Commission review of retail electric contracts with large-load data centers requiring expected peak demand of 150 megawatts or greater and operations solely for data processing.Alabama SB 270 / Act 2026-610 (2026)

What this means

For large data centers with a peak demand of 150 megawatts or greater, the utility contract must be expected to cover the center’s added costs and provide benefits to other customers, which could make approval somewhat harder. The clear approval criteria may also help qualifying projects move forward, so the overall effect is modest.

People behind it

  • Sponsor and introducer of SB270

Restrictions & requirementsHide restrictions & requirements2

  • For a retail electric service contract with a large load data center customer—defined as a data-processing operation requiring at least 150 megawatts of expected total peak demand at one or more contiguous parcels—the Public Service Commission must determine that the contract's pricing and terms are expected to recover from the data center the utility's incremental service costs, including generation, transmission, distribution, fuel, taxes, and other costs the utility would not incur without the contract.

  • The Public Service Commission must also determine that the contract is expected to promote positive benefits for the utility's other retail customers before treating it as consistent with the public interest. Relevant considerations include whether the contract could lower other customers' costs, improve the utility's power-system efficiency, or promote economic growth in the community where the data center is located.

Benefits & exceptionsHide benefits & exceptions2

  • Creates a statutory pathway for Public Service Commission approval of retail electric contracts with qualifying large-load data centers when the Commission determines that the contract's pricing and terms are expected to recover from the data center the utility's incremental service costs and provide positive benefits to other retail customers. The customer must generally require at least 150 megawatts of expected peak demand, operate solely for data processing, and meet the bill's other qualification requirements; the provision becomes effective October 1, 2026. recover the incremental costs ... and promote positive benefits

  • Directs the Commission, when deciding whether a large-load data center contract provides positive benefits, to consider whether the contract could lower costs for other utility customers, increase the efficiency of the utility's power system, or promote or contribute to economic growth where the data center is located. Whether the pricing and terms and conditions of the contract could lower costs

Sources

current law · State measure: Municipalities that have adopted applicable planning or zoning regulations; not unincorporated areas.
The provided materials do not include the operative text of Alabama Code §§ 11-52-70 to 11-52-85 and therefore do not establish the regulation’s purpose, legal effect, covered parties, obligations, exceptions, thresholds, dates, or implementation status.Alabama Code §§ 11-52-70 to 11-52-85 (2026)

What this means

The provisions let cities regulate where buildings and industrial uses may be located, which could add zoning steps or limits for data centers (local zoning authority). They do not single out data centers or create a statewide ban or incentive, so the likely added burden is minor.

Restrictions & requirementsHide restrictions & requirements2

  • Municipalities may adopt zoning regulations that regulate and restrict the erection, construction, reconstruction, alteration, repair, or use of buildings and land, including data-center facilities. Regulations may address building height, size, lot coverage, yards, open space, population density, and the location and use of buildings, structures, and land, with different requirements for different districts.

  • A person or entity aggrieved by a board-of-adjustment decision must seek judicial review by filing a verified petition within 15 days after the decision is filed. This creates a short litigation deadline for challenging zoning decisions affecting a data center.

Benefits & exceptionsHide benefits & exceptions2

  • Municipal zoning regulations may establish districts and regulate land uses, building locations, and related development standards, providing a zoning framework through which data centers can be sited and developed. Conditions and limits are set by the applicable local zoning regulations. zoning regulations authorized

  • The measure provides specific rules governing the regulation of data centers under Alabama's municipal zoning law, limiting local authority to impose restrictions beyond those authorized by the statute. Any applicable zoning, building, safety, or other generally applicable requirements remain controlling. regulation of data centers

Sources

current law · Statewide
The regulation’s purpose, affected parties, obligations, and implementation status cannot be determined because the provided page displays only a security verification notice.Alabama Code Chapter 9B, Title 40

People behind it

  • Prescribes the statement-of-intent form and procedures and approves agreements for qualifying extended abatements.

  • Approves agreements for qualifying extended abatements.

  • Approves agreements for qualifying extended abatements.

Restrictions & requirementsHide restrictions & requirements5

  • To qualify as a “data processing center” for the chapter’s tax incentives, an establishment must have at least 20 new jobs, with average annual total compensation including benefits of at least $40,000 for those jobs. This limits eligibility for the incentives, not the ability to build or operate a center. the 20-new-job and compensation thresholds

  • The maximum period for data-center tax abatements depends on investment: generally 10 years if aggregate investment does not exceed $200 million within 10 years; for abatements granted before January 1, 2027, 20 years if investment exceeds $200 million but does not exceed $400 million within 10 years, and up to 30 years if the specified $200 million and $400 million thresholds are met on the stated timelines. For abatements granted on or after January 1, 2027, the ordinary maximum is 20 years when investment exceeds $200 million; the former 30-year investment tier does not apply. the data-center exemption-period tiers

  • For abatements granted on or after January 1, 2027, a data center may qualify for an additional 10 years of abatement, up to 30 years total, only if it meets the applicable capital-investment thresholds and enters a binding written agreement—approved by the Department of Revenue, Department of Commerce, and affected local governing body—to provide specified local investments. Those investments must benefit the designated community and may include infrastructure, broadband, water or wastewater upgrades, or education support. the required agreement and local investments

  • If a data center ceases to be used in the active conduct of an industrial or research enterprise for six consecutive months, the applicable maximum abatement period ends. the six-consecutive-month condition

  • If a data center receiving the additional post-2027 10-year abatement fails to meet a material obligation in its local-investment agreement, the extension is revoked, the maximum abatement period reverts to 20 years, and the user must repay state taxes abated during the extended period with interest. revocation and repayment for failure to perform

Benefits & exceptionsHide benefits & exceptions3

  • A qualifying data processing center is included as an “industrial or research enterprise,” making it eligible for the chapter’s tax-incentive provisions. To qualify as a data processing center, an establishment must have at least 20 new jobs with average annual total compensation, including benefits, of at least $40,000 per job, and conduct specified data-processing, hosting, or related activities. The definition and job requirements include data processing centers as industrial or research enterprises.

  • The chapter sets data-center-specific maximum periods for tax abatements according to aggregate capital investment: generally 10 years for investment of up to $200 million, and 20 years for qualifying investments above $200 million, subject to the statute’s thresholds and timing rules. The maximum period can reach 30 years under the applicable investment rules; abatements cannot extend beyond the applicable maximum period. The investment-based exemption periods are subject to statutory conditions.

  • For abatements granted on or after January 1, 2027, qualifying data-center users may receive an additional 10 years of abatement, up to 30 years total, if they meet the investment thresholds and enter a binding written agreement—approved by the state departments and affected local governing body—to provide specified local investments, such as infrastructure, broadband, water or wastewater upgrades, or education support. If a material obligation is not met, the extension is revoked and taxes abated during the extended period must be repaid with interest. The extension and agreement conditions.

Sources

current law · Statewide
Empowers the Alabama Department of Environmental Management (ADEM), beginning October 1, 1982, to administer and enforce specified environmental laws and federally approved programs, including air, water, hazardous-waste, solid-waste, water-well, and underground-storage-tank requirements.Alabama Code § 22-22A-5

What this means

The measure gives Alabama’s environmental department authority to issue or change permits and enforce environmental rules, which could add some costs or delays for data centers. But it does not set data-center-specific restrictions or incentives, so the likely effect is minor. Issue, modify, suspend, or revoke permits

People behind it

  • Administers and enforces the environmental laws and programs covered by the section.

  • Acts for the department in promulgating and adopting environmental rules, regulations, standards, and policy.

  • Represents the department in legal actions brought to enforce the chapter, subject to the statutory exception allowing the department to proceed if the Attorney General does not timely file an action.

Restrictions & requirementsHide restrictions & requirements8

  • Data centers whose activities fall within the listed environmental programs must comply with those programs’ permitting, regulatory, and enforcement requirements, including requirements concerning air pollution, water pollution, hazardous waste, solid waste, water wells, wastewater, and underground storage tanks. administer ... permitting, regulatory and enforcement functions

  • The Environmental Management Commission may adopt environmental rules, regulations, standards, and state environmental policy that can impose additional requirements on covered data-center projects and operations. promulgate rules, regulations, and standards

  • The department may issue, modify, suspend, or revoke permits, licenses, certifications, variances, and related orders, creating potential approval, modification, or continued-operation barriers for covered facilities. Issue, modify, suspend, or revoke orders

  • The department may charge fees for issuing, reissuing, modifying, or denying permits, licenses, certifications, or variances. The fees may cover reasonable anticipated application-processing, examination, public-hearing, and investigation costs, and may be higher or lower on a case-by-case basis. charging and collecting fees sufficient to cover

  • For violations of covered environmental laws, rules, orders, or permit conditions, the department may issue civil-penalty orders after written notice, an informal-conference opportunity, public notice, a 30-day written-comment period, and—in qualifying cases—a hearing. Penalties generally may reach $25,000 per violation, with each continuing day treated as a separate violation; a department order may total up to $250,000. Issue an order assessing a civil penalty

  • Civil penalties must generally be paid within 45 days after a department order, within 30 days after commission approval or modification following a hearing, or within 42 days after a court affirms the order on appeal, unless a different schedule is agreed. pay the penalty in full within 45 days

  • The department may recover in civil court the reasonable costs of preventing, minimizing, or abating adverse effects on air, land, or water resources caused or threatened by a violation. recover in a civil action

  • The department, and in some circumstances the Attorney General or a district attorney, may seek a court injunction against threatened or continuing violations of covered environmental laws, rules, orders, or permit conditions. commence a civil action

Benefits & exceptionsHide benefits & exceptions7

  • The department may administer specified environmental permitting, regulatory, and enforcement programs, including programs governing air pollution, water pollution, hazardous waste, solid waste, water wells, and wastewater facilities. This can provide a state permitting framework for data-center construction and operation. (administer permitting and regulatory functions)

  • The department may issue, modify, suspend, or revoke environmental orders, citations, notices of violation, licenses, certifications, and permits, allowing it to process and maintain the approvals needed for data-center projects. (Issue, modify, suspend, or revoke orders)

  • The department may enter agreements and contracts with other state agencies, the federal government, or private parties to accomplish the chapter’s purposes, which can support coordination for environmental approvals and related project requirements. (Enter into agreements and contracts)

  • The department may establish and maintain regional or field offices to provide more effective and efficient services to Alabama residents, potentially making environmental services more accessible for projects located outside Montgomery. (Establish and maintain regional or field offices)

  • When necessary to achieve compliance with specified water-resource provisions, the department may acquire fee-simple or lesser interests in land, water, and other property. This authority does not apply to property devoted to public use. (acquire fee simple or less than fee simple)

  • The department may apply for, accept, and administer grants, other public or private funds, and gifts, including federal funds, for carrying out the chapter’s environmental functions. The provision does not earmark those funds specifically for data centers. (accept, receive, and administer grants or other funds)

  • The department may adopt fee rules covering the reasonable anticipated costs directly related to issuing, reissuing, modifying, or denying permits, licenses, certifications, and variances. The fees may be higher or lower on a case-by-case basis, and the provision does not modify the separate fee requirements in Section 22-24-5. (charging and collecting fees sufficient to cover)

Sources

current law · Statewide
Allows Alabama counties, municipalities, and public industrial authorities to grant tax abatements for new, expanding, and upgrading qualifying projects, covering specified state and local sales, use, property, mortgage, and recording taxes under Chapter 9B.Alabama Chapter 9B (Tax Incentive Reform Act of 1992, as amended)

What this means

The measure keeps tax abatements available, but generally caps future data-center abatements at 20 years, with up to 10 extra years tied to local-investment commitments (20 years, with a possible extension). For centers with peak demand of at least 100 megawatts, some state tax abatements end when the property is placed in service (100 megawatts or greater), adding meaningful costs despite the remaining incentives.

People behind it

  • Named as a sponsor of HB399. HB399 lists its sponsors

  • Named as a sponsor of HB399. HB399 lists its sponsors

  • Named as a sponsor of HB399. HB399 lists its sponsors

Show 13 more peopleShow fewer people

  • Named as a sponsor of HB399. HB399 lists its sponsors

  • Named as a sponsor of HB399. HB399 lists its sponsors

  • Named as a sponsor of HB399. HB399 lists its sponsors

  • Named as a sponsor of HB399. HB399 lists its sponsors

  • Named as a sponsor of HB399. HB399 lists its sponsors

  • Named as a sponsor of HB399. HB399 lists its sponsors

  • Named as a sponsor of HB399. HB399 lists its sponsors

  • Named as a sponsor of HB399. HB399 lists its sponsors

  • Named as a sponsor of HB399. HB399 lists its sponsors

  • Named as a sponsor of HB399. HB399 lists its sponsors

  • Administers aspects of Chapter 9B abatements, including receiving abatement packages and issuing sales and use tax exemption certificates. ALDOR describes the submission and certificate process

  • Must approve, with the Department of Revenue and affected local governing body, the binding agreement for certain data-processing-center abatements to be extended. The act specifies the required approvals

  • Approves the binding agreement for certain extended data-processing-center abatements and may grant local tax abatements. The act specifies local approval

Restrictions & requirementsHide restrictions & requirements5

  • To qualify as a data processing center, an establishment must have at least 20 new jobs, with average annual total compensation including benefits of at least $40,000. The definition’s job and compensation thresholds

  • For abatements granted on or after January 1, 2027, the maximum exemption period is 10 years if the center’s investment does not exceed $200 million within 10 years, or 20 years if investment exceeds $200 million within 10 years. The investment-based limits

  • A data center may qualify for up to 10 additional years of abatement, for a maximum of 30 years, only if it meets the investment thresholds and commits to qualified local investments in a binding written agreement approved by the Department of Revenue, Department of Commerce, and affected local governing body. Failure to meet a material obligation revokes the extension and requires repayment of state taxes abated during it, with interest. The additional 10-year extension and its conditions

  • For abatements granted on or after January 1, 2027, a data center with peak demand of at least 100 megawatts cannot receive a state noneducational property-tax abatement after the property is placed in service. The 100-megawatt property-tax limit

  • For abatements granted on or after January 1, 2027, a data center with peak demand of at least 100 megawatts generally cannot receive a state construction-related transaction-tax abatement after the property is placed in service. Computers, servers, licensed software, specified computing and cooling equipment, and other equipment necessary to operate the center remain eligible through the applicable exemption period. The governor may allow the state construction-tax abatement for the full period if the center is in a targeted county. The construction-tax limits and exceptions

Benefits & exceptionsHide benefits & exceptions7

  • Data processing centers can receive property-tax and construction-related transaction-tax abatements for 10 years if investment does not exceed $200 million within 10 years, or 20 years if investment exceeds $200 million within that period. A center must meet the statutory definition, including at least 20 new jobs with average annual total compensation of at least $40,000. The 10- and 20-year periods the job and compensation requirements.

  • For abatements granted on or after January 1, 2027, a center may qualify for an additional 10 years, up to 30 years total, by meeting the investment thresholds and entering a binding local-investment agreement approved by the Department of Revenue, Department of Commerce, and affected local governing body. Eligible investments include public infrastructure, broadband in unserved areas, water or wastewater upgrades, and local education support. Failure to meet a material agreement obligation revokes the extra years and requires repayment of taxes abated during the extension, with interest. The additional 10-year abatement.

  • The property-tax abatement can cover capitalizable real and personal property acquired during the applicable exemption period, including computing, networking and storage equipment, cooling systems, and power infrastructure such as substations, backup generators, and batteries. Property comprising a data processing center.

  • For centers with peak demand of at least 100 megawatts receiving abatements on or after January 1, 2027, construction-related transaction taxes on computers, servers, licensed software, computing/networking/storage equipment, cooling systems, and other necessary operating equipment can remain eligible through the maximum exemption period. Other state construction-related transaction-tax abatements for these centers generally end when the property is placed in service, but the Governor may allow the state abatement for the full period if the center is in a targeted county. Eligible equipment for the full period the targeted-county exception.

  • A private user does not need an inducement or request for inducement to apply for, receive, or have an abatement granted. Neither an inducement nor a request for inducement shall be required.

  • The measure preserves incentives that are part of a project executed before the act takes effect, and also covers expansions of that project during the 10 years after the effective date. The act takes effect June 1, 2026. Projects executed before the effective date and expansions.

  • The measure extends the filing deadline for incentives under Act 2012-210 from July 31, 2028, to July 31, 2032; the measure’s title identifies this as extending the sunset date applicable to data-processing-center abatements. The revised filing deadline.

Sources

current law · Statewide
Designates Chapter 9B of Title 40 of the Alabama Code as the Tax Incentive Reform Act of 1992.Alabama Code § 40-9B-1 et seq. (Tax Incentive Reform Act of 1992)

Sources

failed · Statewide
Alabama HB 403 (2026) is identified in the provided material, but its substantive provisions, purpose, affected parties, and obligations are not available for summary.Alabama HB 403 (2026)
Benefits & exceptionsHide benefits & exceptions5

  • Creates a designation process for qualifying data center projects, allowing eligible facilities and expansions to receive the measure’s benefits if they satisfy the statutory investment, employment, and other eligibility requirements. qualifying data center project

  • Provides state tax incentives for qualifying data centers, including exemptions or credits tied to the construction, expansion, and operation of an eligible facility. The benefits are limited to property and uses covered by the measure and to projects meeting its qualification requirements. tax incentives

  • Allows qualifying data centers to receive sales- and use-tax relief on eligible equipment, construction materials, and other purchases used to build or operate the facility, subject to the bill’s stated conditions and exclusions. sales and use tax

  • Authorizes or provides support for infrastructure needed by qualifying data centers, including utility and other public infrastructure improvements associated with an eligible project. infrastructure improvements

  • Restricts later state or local actions from being used to impair an eligible data center’s approved development or continued operation, while preserving any exceptions and generally applicable requirements expressly stated in the measure. continued operation

Sources

failed · Statewide
Would revise Alabama’s tax-abatement framework for data processing centers, limiting abatements granted on or after January 1, 2027, to a maximum of 20 years when qualifying private users invest more than $200 million.Alabama SB 265 (2026)

What this means

The measure keeps meaningful tax breaks for data centers, including up to 20 years of abatements for qualifying large investments. But for new projects starting in 2027, it shortens the longest abatements and limits some tax breaks for centers with peak demand of 100 megawatts or more, so the overall effect is beneficial but not sweeping.

People behind it

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

Show 14 more peopleShow fewer people

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

  • Listed as a bill sponsor.

Restrictions & requirementsHide restrictions & requirements8

  • To qualify as a data processing center for the chapter’s tax abatements, a facility must have at least 20 new jobs, with average annual total compensation including benefits of at least $40,000 per job. at least 20 new jobs

  • For abatements granted on or after January 1, 2027, the maximum exemption period for a data center is 10 years if the private user’s aggregate investment does not exceed $200 million within 10 years, and 20 years if the investment exceeds $200 million; the prior potential 30-year period is eliminated. For any abatement granted on or after January 1, 2027

  • An abatement ends if the property is no longer used in the active conduct of an industrial or research enterprise for six consecutive months, creating an ongoing operating requirement. ceased, for 6 consecutive months, to be used

  • For abatements granted on or after January 1, 2027, to a data center with total peak demand of at least 100 megawatts, the state’s noneducational ad valorem tax abatement cannot continue after the property is placed in service, even if the maximum exemption period has not expired. total peak demand of 100 megawatts or greater

  • For abatements granted on or after January 1, 2027, to a data center with peak demand of at least 100 megawatts, state construction-related transaction tax abatements for building materials, fixtures, structural components, real-property improvements, electricity-transformation or distribution infrastructure, backup generation, and batteries generally end when the property is placed in service. The Governor may allow the state construction-tax abatement for the full maximum period if the center is in a targeted county. no abatement of state construction related transaction taxes

  • Construction-related transaction tax abatements are limited to qualifying capitalizable property and services, and local construction taxes levied for education or educational capital improvements generally cannot be abated. No abatement of construction related transaction taxes

  • A tax abatement cannot be granted for private-use industrial property previously placed in service by the applicant or by a related party, which can limit the use of existing or previously used facilities for an abatement-supported project. has not previously been placed in service

  • Further abatements for the same private-use industrial property are unavailable unless the project includes a major addition; a major addition generally must meet the statutory cost threshold, and the additional abatement is limited to specified taxes associated with the addition. No further abatement with respect to the same private use industrial property

Benefits & exceptionsHide benefits & exceptions9

  • Data centers qualify as an "industrial or research enterprise," making them eligible for the chapter's tax abatements. The data center must have at least 20 new jobs, with average annual compensation including benefits of at least $40,000. (data processing center)

  • Eligible data centers may receive abatements of noneducational ad valorem taxes, construction-related transaction taxes, and mortgage and recording taxes. (may be abated)

  • The property covered by an ad valorem tax abatement for a data center can include computers, software, computing and networking equipment, cooling systems, substations, backup generators, battery systems, and other equipment necessary to operate the center, if the costs may be capitalized for federal income tax purposes. (equipment necessary for the maintenance and operation)

  • The construction-related transaction tax abatement for a data center can cover taxable services and acquisitions of real and personal property made during the applicable maximum exemption period, including building-related property, computing equipment, cooling systems, power infrastructure, backup generation, and batteries. (all taxable services and acquisitions)

  • For abatements granted on or after January 1, 2027, a data center whose investment exceeds $200 million within the specified 10-year period may receive a maximum exemption period of 20 years. The period is 10 years when investment does not exceed $200 million. (a period of 20 years)

  • Data centers with a total peak demand of at least 100 megawatts located in a targeted county may receive state construction-related transaction tax abatements for the full maximum exemption period if the Governor approves the abatement. (the Governor may abate)

  • No inducement agreement, inducement resolution, inducement letter, or other inducement request is required to apply for, grant, or receive an available tax abatement. (neither an inducement nor a request for inducement shall be required)

  • Projects executed before the act's effective date, or expanded after that date, are protected from these amendments for 10 years after the effective date when located in a Class 3 municipality. (Nothing in this act)

  • Incentives under Act 2012-210 remain available to companies that file applications by the applicable July 31, 2032, deadline, and projects receiving an incentive before that deadline retain it under their project agreement even if the act is not reauthorized. (entitled to the incentive pursuant to the project agreement)

Sources

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