Subnational jurisdiction · as of 2026-09-06
Tennessee's data-center permitting spine runs through general-purpose county and municipal zoning enabling statutes, the State Fire Marshal's adopted building code, the Tennessee Public Utility Commission's jurisdiction over investor-owned utilities, and the Department of Environment and Conservation's air permitting program; none of these is data-center specific.
The Data Center Cost Responsibility Act (2026) is data-center specific: it generally bars a municipality or electric utility from paying or absorbing the cost of electrical infrastructure built to serve a data center, requires that cost to fall on the data center's owner or operator, and separately authorizes a data center to buy power directly from an independent power producer located in Tennessee, including behind the meter, subject to the serving utility's written approval where the data center also takes utility service.
Tennessee's principal data-center tax incentive is a reduced 1.5 percent sales and use tax rate on electricity, and a full exemption for cooling equipment and backup power infrastructure, sold to or used by a qualified data center, defined as a facility making a capital investment exceeding $100,000,000 over up to three years and creating at least 15 net new full-time jobs paying at least 150 percent of the state's average occupational wage; a qualified data center may also apply for the state's general jobs tax credit against the franchise and excise tax.
The Tennessee Valley Authority, which supplies most of the state's wholesale power, is a federal agency and its own transmission and generation activity is not catalogued here.
7 instruments on record, grouped by the family of approval each one governs.
Who decides whether a data center may occupy a site, and through what approval?
Applies to both
Empowers a county legislative body to regulate, outside municipal corporations, the location, height, and size of buildings, the uses of buildings and land for trade and industry, and the density and distribution of population, through a county zoning ordinance. A data center sited in unincorporated Tennessee proceeds through this enabling authority for its rezoning or special exception approval.
Source: Full text of law
Applies to both
Empowers the chief legislative body of a municipality to regulate, for the promotion of public health, safety, and general welfare, the location, height, and size of buildings and the use of buildings and land for trade and industry, through a municipal zoning ordinance. A data center sited within city limits proceeds through this enabling authority and the city's own zoning and rezoning procedures.
Source: Full text of law
What authorizations govern grid connection and onsite generation?
Tenn. Code Ann. §§ 7-70-101, 7-70-102 (Pub. Ch. 961, 2026)
Effective 2026-05-07 · Applies to both
Except where the electric utility's own generally applicable reimbursement or cost-allocation policies permit it, a municipality or electric utility may not pay or otherwise absorb the cost of electrical infrastructure incurred to serve a data center.
A data center is defined as a building primarily housing electronic equipment and environmental control equipment that is projected to have a peak electric demand of 50 megawatts or more within its first three years of operation, excluding a facility owned by the state or by a telecommunications or broadband provider supporting its own network operations.
A data center may purchase and receive electric energy, capacity, or other related or ancillary services from an independent power producer located in Tennessee, including through a direct interconnection behind the data center's meter, with the serving electric utility's written approval where the data center also takes utility service, subject to applicable federal law.
Source: Full text of law
Applies to both
Gives the Tennessee Public Utility Commission general supervisory and regulatory power, jurisdiction, and control over public utilities and their property, facilities, and franchises, as necessary to carry out the utility regulation chapter. Most Tennessee electric distribution is by municipal and cooperative systems served wholesale by the Tennessee Valley Authority, a federal agency whose own wholesale rates fall outside the commission's ratemaking jurisdiction.
Source: Full text of law
What codes and permits govern the build itself?
Applies to both
Requires a local government administering its own building inspection program to adopt, for construction other than one-family and two-family dwellings, a building construction safety code consisting of the International Building Code and a fire code, as administered by the Division of Fire Prevention within the Department of Commerce and Insurance or the State Fire Marshal. A data center's building permit issues under the code as locally adopted and enforced.
Source: Full text of law
What permits govern backup generators and ongoing emissions?
Applies to both
Authorizes the Air Pollution Control Board to promulgate rules establishing ambient air quality and emission standards, a system of permits, and fees for permit review, and authorizes the technical secretary to issue permits under those rules and the federal Clean Air Act. A data center's backup generator fleet permits as a stationary air contaminant source under this authority, administered by the Department of Environment and Conservation.
Source: Full text of law
What fiscal agreements attach a data center to its host jurisdiction?
Tenn. Code Ann. § 67-6-206(c); § 67-6-102(81)
Applies to private
Electricity sold to or used by a qualified data center is taxed at a reduced rate of 1.5 percent, and cooling equipment and backup power infrastructure sold to or used by a qualified data center is exempt from sales and use tax outright.
A qualified data center is defined as a data center that makes a capital investment exceeding $100,000,000 over an investment period of up to three years and creates at least 15 net new full-time jobs paying at least 150 percent of the state's average occupational wage.
A qualified data center applying for the general jobs tax credit against the franchise and excise tax under Tenn. Code Ann. § 67-4-2109 must certify it has not been found, within the prior 12 months, to have violated federal worker-notice, wage-and-hour, or immigration law.
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.