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Regbase

The Data Center Divide

Sevier County

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

Slightly Pro-Data Center Policies

Arkansas offers qualifying data centers substantial tax breaks on equipment, services, and electricity, but firms must meet demanding investment and other conditions. Other rules described mainly target digital-asset mining, not ordinary data centers.

Incentives

Tax benefits
2

Expands the sales and use tax exemption to qualified large data centers, covering data center equipment, eligible costs, related services and electricity purchased by qualifying firms.

Arkansas HB 1444 (2025)

Provides sales and use tax exemptions for eligible data center equipment, costs, related services, and electricity used by a qualified data center (the listed sales are exempt).

Arkansas Act 819 (2023)

current law · Statewide
Requires local governments to apply the same requirements to digital-asset mining businesses as to data centers.Arkansas Act 851 (2023)

What this means

The measures mainly target digital-asset mining businesses, not data centers generally; the new permits and noise rules apply to mining businesses wishing to operate in Arkansas. So they have little direct effect on building, expanding, or operating ordinary data centers.

People behind it

  • Sponsor of HB1799 (Act 851) and sponsor of SB78 (Act 173). HB1799 lists McClure as sponsor.

  • Sponsor of HB1799 (Act 851) and co-sponsor of SB78 (Act 173) and SB79 (Act 174). HB1799 lists J. Bryant as a primary sponsor.

  • Co-sponsor of SB78 (Act 173) and SB79 (Act 174). SB79 identifies Senators Irvin and J. Bryant.

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  • Co-sponsor of SB79 (Act 174). SB79 identifies Representative J. Moore.

  • Administers the digital asset mining permit and regulatory system under Act 174, including rulemaking, enforcement, and complaint handling. The commission shall establish the permit application.

  • May investigate and pursue enforcement actions concerning prohibited foreign-party ownership of digital asset mining businesses under Act 173. The Attorney General may conduct an investigation.

Restrictions & requirementsHide restrictions & requirements10

  • A digital asset mining business—defined as a site using more than 1 MW on an average annual basis—must comply with applicable state business and tax laws, operations-and-safety ordinances, public-entity utility rules and rates, and employment laws. Miners must pay applicable taxes and fees and operate without stressing a public utility’s generation or transmission system. complies with

  • A mining business must apply noise-reduction techniques, including liquid or submerged cooling or a fully enclosed envelope meeting the stated noise-reduction standard. A passively cooled premanufactured container alone does not qualify, except when the business uses the approved-location option: with local-government approval, locate or relocate at least 2,000 feet from the nearest residential or commercial-use structure, in an industrial-zoned area, or in another approved-use area. Existing businesses had 90 days after Act 173’s effective date to comply. noise-reduction techniques

  • A person owning land within 2,000 feet of a mining business’s nearest property line may sue in circuit court to enforce the noise-reduction requirements; a prevailing plaintiff may receive reasonable attorney’s fees and costs. may commence an action

  • Local governments may adopt and enforce ordinances regulating mining businesses in areas not already addressed by federal or state law or Oil and Gas Commission rules, provided the ordinances are consistent with those authorities. not otherwise addressed

  • A mining business may not operate in Arkansas without a valid permit from the Oil and Gas Commission. The Commission is to set permit, application, renewal, permit-term, and operating requirements, and issuance depends on compliance with applicable state laws. without a valid permit

  • Individuals or entities operating mining businesses when the Commission’s initial rules take effect must apply for a permit for each business within 90 days. They may continue operating while the application is pending, but must stop if they miss the application deadline or their application is denied. ninety (90) days

  • The Oil and Gas Commission may investigate complaints about legal, permit, or rule compliance, including through inspections, records examinations, hearings, and reporting requirements; it may assess penalties and issue enforcement orders. file a complaint

  • Commission rules may impose financial penalties of up to $5,000 per day for noncompliance and may suspend or revoke a permit. shall not exceed five thousand dollars

  • A prohibited foreign party may not acquire or hold any ownership interest greater than zero in an Arkansas mining business, and a person may not hold a business as that party’s agent or fiduciary. Existing businesses had 365 days after the applicable act’s effective date to divest prohibited interests. shall not acquire or hold

  • A prohibited foreign-party-controlled business must report its ownership composition to the Attorney General. If prohibited ownership is not divested as required, the Attorney General may investigate and seek judicial foreclosure and other remedies, including a civil penalty up to $1 million or 25% of the fair market value of the prohibited party’s interest; additional remedies can include treble damages for failure to pay an ordered penalty. report the composition of its ownership

Benefits & exceptionsHide benefits & exceptions7

  • A digital asset mining business may locate in an industrially zoned area, provided the local government has not designated it for another use. “zoned for industrial use”

  • Local governments may not impose different requirements on a digital asset mining business than those applicable to data centers, or rezone its area with the intent or effect of discrimination. A business may appeal a zoning change under applicable state law or local zoning rules. “different requirement”

  • The Arkansas Public Service Commission may not establish an unreasonably discriminatory utility rate for a digital asset mining business customer. “unreasonably discriminatory rate”

  • A person engaged in home digital asset mining or operating a digital asset mining business is not treated as a money transmitter under Arkansas’s Uniform Money Services Act. “shall not be considered a money transmitter”

  • An individual may use a node for home digital asset mining at their residence under applicable utility rules and rates. Local governments may not prohibit home mining or require local approval for it. “operating home digital asset mining”

  • For noise compliance, businesses may use liquid or submerged cooling, fully enclose the equipment, or—with local-government approval—locate at least 2,000 feet from the nearest residential or commercial structure, or in an industrially zoned or otherwise approved area. The act generally excludes passively cooled premanufactured containers from the enclosure option unless the business uses the specified location alternative. “Apply noise-reduction techniques”

  • Businesses already operating when the initial permitting rules take effect may continue operating while the rules are issued, during the 90-day application period, and while the commission considers a timely permit application. A business that fails to apply within that period or whose application is denied must cease operations. “While the Oil and Gas Commission is considering”

Sources

current law · Statewide
Expands the sales and use tax exemption for qualifying data centers, including large multi-site facilities, while requiring minimum investment and payroll levels and a positive cost-benefit review.Arkansas HB 1444 (2025)

What this means

The measure offers a meaningful tax break on data center equipment, eligible costs, services, and electricity, which can reduce the cost of building and operating qualifying centers. But firms must meet large investment and compensation thresholds and receive a positive cost-benefit review, so the benefit is substantial but conditional.

People behind it

  • House sponsor of HB1444.

  • Senate sponsor of HB1444.

  • Must provide a positive cost-benefit analysis for a facility to qualify for the exemption.

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  • Receives and decides exemption applications, certifies eligible data centers, and issues financial incentive certificates.

Restrictions & requirementsHide restrictions & requirements11

  • To qualify for the tax exemption as a qualified data center, the facility must receive a positive cost-benefit analysis from the Arkansas Economic Development Commission.

  • A qualified data center must make at least $500 million in qualified investment within five years of the specified certificate-of-occupancy milestone.

  • A qualified data center must meet an aggregate annualized compensation threshold of at least $1 million, including compensation paid by contractors, for the two calendar years following the calendar year operations begin.

  • A qualified large data center must receive a positive cost-benefit analysis from the Arkansas Economic Development Commission.

  • A qualified large data center must make at least $2 billion in qualified investment within ten years after construction begins.

  • A qualified large data center must meet an aggregate annualized compensation threshold of at least $3 million, including contractor compensation, for the two calendar years following the calendar year operations begin.

  • A facility primarily engaged in adding virtual-currency transactions to a distributed ledger is ineligible for the data-center tax exemption.

  • A firm must apply to the Department of Finance and Administration for the exemption. The department must decide on a completed application within 30 days; if an application is denied as incomplete, the firm has 15 days to supply the missing information or complete it to retain the original submission date.

  • Firms receiving an approved financial incentive certificate must report specified investment and compensation information: when the required investment threshold is met and, during the applicable compensation period, annually for each calendar year.

  • If a qualified data center or qualified large data center falls below its required aggregate compensation threshold, its financial incentive certificate must be revoked.

  • If a qualified large data center fails to meet its $2 billion investment requirement, its financial incentive certificate must be revoked. A facility within it may remain eligible if it independently meets the qualified-data-center requirements.

Benefits & exceptionsHide benefits & exceptions4

  • Qualified data centers and qualified large data centers can claim a sales and use tax exemption on eligible data center equipment and costs, related development and operating services, and electricity. Eligible equipment includes power-generation and distribution systems, cooling equipment, water-conservation systems, modular data centers, installation and maintenance labor, and off-site cabling directly connecting distributed locations. The exemption is limited to facilities and firms that meet the act’s qualification requirements. The listed sales and electricity are exempt and the equipment definition includes off-site cabling.

  • The Department of Finance and Administration must decide a completed exemption application within 30 days. If it is denied as incomplete, the applicant has 15 days to provide the missing information and have the application treated as complete on its original submission date. The department shall grant or deny the application within thirty days.

  • A firm with a certified qualified data center may ask the department to recertify it together with additional in-state facilities as a qualified large data center, providing a route to qualify an expanded, multi-location operation for the exemption. The qualified firm may request that the department recertify.

  • If a qualified large data center fails to meet its overall investment requirement, a facility within it can remain eligible for the exemption if that facility independently satisfies the requirements for a qualified data center. Each facility within a qualified large data center.

Sources

current law · Statewide
Requires digital-asset mining businesses to reduce operating noise and bars local governments from imposing requirements on them that differ from those applied to data centers.Arkansas Act 173 (2024)

What this means

The measure mainly regulates digital asset mining, not data centers generally: it adds noise-reduction and foreign-ownership rules for mining businesses. Its provision barring different requirements for mining businesses than for data centers offers some protection, but does not meaningfully change the rules for building or operating data centers. The different-requirement provision

People behind it

  • Lead Senate sponsor of SB78.

  • Senate co-sponsor of SB78.

  • Representative and other primary sponsor of SB78.

Restrictions & requirementsHide restrictions & requirements11

  • Digital asset mining businesses must use noise-reduction techniques, including liquid or submerged cooling, fully enclosing the noise-producing equipment on all sides, or, with local-government approval, locating or relocating at least 2,000 feet from the nearest residential or commercial-use structure or in an industrial-zoned or otherwise approved area.

  • A passively cooled premanufactured container does not satisfy the enclosure requirement unless the entire system is additionally enclosed, except when the business locates or relocates under the approved 2,000-foot or zoning options.

  • A digital asset mining business operating before the act’s effective date must comply with the new noise-reduction requirements within 90 days after the act becomes effective.

  • A person who owns land within 2,000 feet of the nearest property line of a digital asset mining business may sue in circuit court to enforce the required noise-reduction techniques, and a prevailing plaintiff may receive reasonable attorney’s fees and costs.

  • A prohibited foreign party may not acquire or hold any ownership interest greater than zero percent in an Arkansas digital asset mining business, and a person may not hold such a business as an agent, trustee, or fiduciary for a prohibited foreign-party-controlled business.

  • A prohibited foreign-party-controlled business operating before the act’s effective date has 365 calendar days after the effective date to divest all prohibited foreign-party interests.

  • The Attorney General may investigate suspected foreign-ownership violations, receive sworn statements, and subpoena witness testimony and business records.

  • If a prohibited foreign party fails to divest within the required 365-day period, the Attorney General may seek a court-ordered judicial foreclosure sale of the digital asset mining business.

  • Failure to divest prohibited foreign ownership can result in a civil penalty of up to $1 million or up to 25 percent of the fair market value of the prohibited foreign party’s interest, plus court costs, interest, and reasonable attorney’s fees.

  • A digital asset mining business that remains in violation, is ordered to pay the civil penalty, and fails to pay it may be subject to treble damages.

  • A prohibited foreign-party-controlled business must report the composition of its ownership to the Attorney General.

Benefits & exceptionsHide benefits & exceptions6

  • A local government may not impose a requirement on a digital asset mining business that differs from a requirement applicable to a data center.

  • A local government may not rezone an area with the intent or effect of discriminating against a digital asset mining business, and any rezoning must comply with applicable state law and local zoning ordinances.

  • Digital asset mining businesses may satisfy noise-reduction requirements through liquid or submerged cooling, a fully enclosed system, or—upon local-government approval—relocation to an area at least 2,000 feet from the nearest residential or commercial-use structure or to an industrial or otherwise approved zone.

  • A passively cooled premanufactured container may be used without additional complete enclosure when the business locates or relocates under the approved 2,000-foot or zoning-based siting options.

  • Local governments may not prohibit home digital asset mining or require prior local-government approval for it.

  • Local governments may not impose sound-decibel limits on home digital asset mining beyond generally applicable sound-pollution limits.

Sources

current law · Statewide
Requires large digital-asset mining operations to obtain state permits, bars local governments from imposing mining-specific requirements different from those for data centers, and restricts certain foreign ownership; enforcement is currently enjoined.Arkansas Act 174 (2024)

What this means

The new permit and ownership restrictions apply to digital-asset mining businesses, not ordinary data centers (businesses using more than 1 MW to generate digital assets). The measure also says mining businesses cannot face different requirements from data centers, so its overall effect on building or operating standard data centers is not meaningful (different requirement).

People behind it

  • Lead sponsor of SB79.

  • Other primary sponsor of SB79.

  • Co-sponsor of SB79.

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  • Assigned permitting, rulemaking, and enforcement responsibilities under the measure.

  • Authorized to investigate and enforce the measure’s restrictions on prohibited foreign-party ownership.

Restrictions & requirementsHide restrictions & requirements6

  • A digital asset mining business—defined as computers at one site using more than 1 MW of electricity on an average annual basis to generate digital assets—must obtain a valid Oil and Gas Commission permit to operate. The Commission may set application, renewal, permit-term, and operating requirements. A valid permit

  • Existing businesses had to apply for a permit for each site within 90 days after the initial Commission rules took effect. They could keep operating before those rules, during the 90-day application period, and while an application was under review; a business had to stop operating if it missed the application deadline or its application was denied. Within ninety (90) days

  • The Commission can investigate complaints, inspect properties and records, hold hearings, and require records and reports. It may assess penalties for noncompliance, including financial penalties of up to $5,000 per day and suspension or revocation of a permit. shall not exceed five thousand dollars ($5,000) per day

  • Local governments may adopt and enforce regulations of digital asset mining businesses only on subjects not otherwise addressed by federal law, state law, or Commission rules, and only if the local regulations are consistent with them. not otherwise addressed

  • A prohibited foreign party may not hold any ownership interest in an Arkansas digital asset mining business. A covered business already operating when the act took effect had 365 days to divest that interest; a court may order a violating business sold through judicial foreclosure, and the Attorney General may seek a civil penalty of up to $1 million or 25% of the value of the prohibited party’s interest. shall not acquire or hold

  • A prohibited foreign-party-controlled business must report its ownership composition to the Attorney General. shall report the composition of its ownership

Sources

current law · Statewide
Provides sales and use tax exemptions for data-center equipment, eligible development and operating costs, related services, and electricity used by a qualified data center.Arkansas Act 819 (2023)

What this means

The measure would offer broad sales and use tax exemptions for data center equipment, eligible costs, related services, and electricity, making building and operating qualifying centers substantially cheaper. The benefit is limited to projects that meet demanding conditions, including at least $500 million in investment and other eligibility requirements, so the incentives are substantial but not available to every data center.

People behind it

  • House bill sponsor.

  • Senate bill sponsor.

  • Provides the required cost-benefit analysis for a qualified data center.

Benefits & exceptionsHide benefits & exceptions2

  • Qualified data centers receive exemptions from Arkansas gross receipts and compensating use taxes on data center equipment, eligible data center costs, services used to develop or operate the center, and electricity. Eligibility is limited to centers operated by a qualifying for-profit firm, including requirements for a $500 million qualified investment, minimum employee compensation, and a positive cost-benefit analysis from the Arkansas Economic Development Commission. (The listed sales are exempt)

  • The incentive application process sets a 30-day deadline for the commission to grant or deny a completed application. If an application is denied as incomplete, the firm may supply the missing information or complete the application within 15 days to preserve the original submission date. (Within thirty days after receipt of a completed application)

Sources

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