Tax Incentives for Data Centers

179D tax deductions and Sales and Use Tax Exemptions enable data centers to recover costs on energy-efficient upgrades and reduce taxes on eligible equipment and utilities, optimizing financial and operational efficiency.

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Unlock Substantial Tax Savings for Data Center Operations

Data centers are capital-intensive, high-consumption facilities, and that makes them prime candidates for targeted tax incentives. Federal and state governments offer a range of programs designed to reward investment in energy efficiency, infrastructure, and long-term job creation. Leyton helps data centers navigate this complex incentive landscape, optimizing eligibility and maximizing ROI through credits like the 179D deduction and state-level sales and use tax (SALT) exemptions.

How Data Centers can qualify for the 179D Tax Deduction Qualifying categories include:

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HVAC and cooling infrastructure
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Interior lighting systems
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Building envelope (insulation, roofs, walls, windows)

Who can qualify for the 179D Tax Deduction Qualifying parties include:

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Data center owners
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Designers (for government-owned buildings)
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Tenants who make qualifying improvements

Everything You Need to Know
About the 179D Tax Deduction

Discover how you could save up to $5.81 per sq. ft. for systems placed in service after 2023 (based on prevailing wage and apprenticeship compliance).

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How your data center can qualify for State Level Sales and Use Tax Exemptions Typical Exempt Items:

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Capital investment thresholds (e.g., $100M+ over a period) 
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Job creation or wage standards 
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Minimum square footage or power usage 
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Certification or application process with state or local authorities 
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Use of the property for qualifying data center functions 
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Electricity or other utilities used in operation (in some states)

How your data center can qualify for State Level Sales and Use Tax Exemptions Common Qualification Requirements:

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Capital investment thresholds (e.g., $100M+ over a period) 
business_center
Job creation or wage standards 
battery_full
Minimum square footage or power usage 
workspace_premium
Certification or application process with state or local authorities 
task_alt
Use of the property for qualifying data center functions

Everything You Need to Know
About the Sales and Use Tax Exemptions

Discover how you could significantly reduce capital expenditures on equipment and energy by leveraging incentives available for qualifying facilities in over 30 U.S. states.