Data-center law in Arizona

Subnational jurisdiction · as of 2026-09-06

Arizona's principal data-center-specific law is a tax-incentive scheme rather than a siting statute: A.R.S. § 41-1519 lets the owner or operator of a computer data center apply to the Arizona Commerce Authority for certification, which unlocks transaction-privilege and use tax relief on data center equipment purchases, so long as the project meets minimum investment thresholds.

Beyond this incentive, a data center in Arizona proceeds under the state's ordinary, generally applicable land-use, building, and environmental permitting framework (municipal or county zoning and site-plan approval, the state building code, air-quality permitting for backup generators, and stormwater permitting for construction), none of which is data-center-specific and none of which is separately catalogued here.

Arizona's assured-water-supply program under the Groundwater Management Act (Title 45), administered by the Arizona Department of Water Resources within the state's Active Management Areas, is commonly cited as a real practical siting constraint on a water-intensive project in the Phoenix and Tucson areas, but no section of it was confirmed here to bind a data-center operator specifically, so it is noted as background rather than as an instrument.

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Instruments on record

1 instrument on record, grouped by the family of approval each one governs.

Public agreements

What fiscal agreements attach a data center to its host jurisdiction?

Computer data center program certification and tax relief

In force

A.R.S. § 41-1519; implementing tax exemptions at §§ 42-5061(B)(23), 42-5159(B)(24)

Effective 2013-08-31 · Applies to private

An owner or operator of a computer data center, including a qualified colocation tenant, may apply to the Arizona Commerce Authority for certification, which the authority must approve or deny in writing within sixty days, and which entitles the applicant to tax relief for a qualification period running through the tenth full calendar year after certification, or the twentieth for a sustainable redevelopment project.

To qualify, a new computer data center must reach a minimum investment within five years of certification of $25,000,000 in a county of 800,000 people or fewer, or $50,000,000 in a larger county; an existing computer data center instead qualifies by having invested at least $250,000,000 in the 72 months before September 1, 2013.

The authority may revoke certification for noncompliance, which can trigger recapture of tax relief by the Department of Revenue, and the authority may not certify any new computer data center whose application is submitted after December 31, 2033.

A.R.S. § 42-5061(B)(23) exempts from the transaction privilege tax the sale of computer data center equipment to the owner, operator, or a qualified colocation tenant of a computer data center certified under this section, during the certification's qualification period. A.R.S. § 42-5159(B)(24) provides the parallel exemption from the use tax on the same equipment. Tax relief under this program has been allowed from and after August 31, 2013.

Source: Full text of law

Every entry cites the instrument it describes. None of it is legal advice: verify a citation before relying on it. Full sourcing: read the methodology. The rest of the record: all jurisdictions.