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Data Center Dilemma: Are States Reconsidering Tax Incentives?

08.07.2026 | Duration: 18:22

As the demand for AI drives a data center boom, states are hitting the brakes on once-generous tax incentives. This TWIST podcast explores the legislative flurry aimed at curbing these programs and what it may signal for the future.

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A few years ago, states eagerly offered tax incentives to attract data center development and the investment and jobs they promised. Now, the tide is turning. Spurred by the explosive growth of AI and mounting concerns from citizens about electricity prices, energy availability, and the true fiscal impact of these facilities, state legislatures are taking a closer look.

In this latest TWIST podcast, host Harley Duncan is joined by Jeff Cook to discuss the recent wave of state-level actions, from repealing sales tax exemptions in North Carolina to imposing new electricity consumption taxes in Virginia. They also cover the trend of states like Arizona and Ohio pausing new incentive programs to study their effectiveness, and New York's "nuclear option" of a full moratorium on new data center construction. Tune in to understand why this has become a hot-button bipartisan issue and what data center operators should expect as the 2027 legislative sessions approach.

Meet our podcast team

Image of Harley T. Duncan
Harley T. Duncan
Consultant to KPMG
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Harley T. Duncan

Consultant to KPMG

Harley T. Duncan is a consultant to the KPMG State and Local Tax practice. He joined KPMG in 2008 and served as leader of the Washington National Tax State and Local Tax Group through 2021. Harley spent the previous 20 years as Executive Director of the Federation of Tax Administrators and has worked with Kansas and South Dakota state governments. He focuses on sales, use and excise taxes as well as matters of state tax policy and tax administration and assists KPMG with the weekly This Week in State Tax (TWIST) publication and podcast series.
Image of Jeffrey M Cook
Jeffrey M Cook
Managing Director, Tax, KPMG US
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Image of Harley T. Duncan
Harley T. Duncan
Consultant to KPMG
Read bio
Image of Harley T. Duncan

Harley T. Duncan

Consultant to KPMG

Harley T. Duncan is a consultant to the KPMG State and Local Tax practice. He joined KPMG in 2008 and served as leader of the Washington National Tax State and Local Tax Group through 2021. Harley spent the previous 20 years as Executive Director of the Federation of Tax Administrators and has worked with Kansas and South Dakota state governments. He focuses on sales, use and excise taxes as well as matters of state tax policy and tax administration and assists KPMG with the weekly This Week in State Tax (TWIST) publication and podcast series.
Image of Jeffrey M Cook
Jeffrey M Cook
Managing Director, Tax, KPMG US
Read bio

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TWIST - This Week in State Tax

What’s included: Discussion on noteworthy developments with broad applicability to taxpayers across the country. Brought to you by: KPMG Washington National Tax – State and Local Tax practice.

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Webcast Replay Webcast Upcoming Listen Now From The Web

This Week in State Tax

This Week in State Tax (TWIST) is a series providing the latest updates on the ever-changing state and local tax environment.

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