Secret data center tax breaks are a bad deal for North Carolina | Opinion

North Carolina has long been a better-than-average state for economic development incentive transparency. But with data centers owned by the world’s most valuable corporations, that’s all changed.

Since 2003, N.C. taxpayers have been able to go online and see company-specific records of tax breaks and grants. But now, for data centers, the state is hiding costs and exaggerating benefits. It’s a dangerous development that puts the state’s budget at risk.

When Amazon recently announced a $10 billion data center project in Richmond County, Governor Stein declared the project will bring “hundreds of good-paying jobs and an economic boost to Richmond County.” But very few details were provided about how this “boost” would occur — and even less was revealed about how much North Carolina taxpayers will pay for the deal.

The governor appears to have exaggerated the project’s benefits. The fine print of the local incentive agreement requires Amazon to invest $1 billion — not $10 billion. It requires only 50 jobs – not the “hundreds” the governor announced.

As to costs, neither the state nor the county are saying. Under a special state law for data centers, Amazon will never pay sales and use tax when it buys servers, cooling systems, cabling, software, batteries, standby generators, and other equipment. It will not pay tax on its massive electricity usage.

That means Amazon will not pay 4.75% sales tax to the state nor 2% local sales tax to Richmond County that virtually every other consumer and business must pay. Worse still, there is no disclosure of how much these tax breaks would total.

The Richmond County Board of Commissioners approved a property tax abatement that will last for 20 years. But the county did not disclose the cost of that abatement. And incredibly, the vote was under a project code name. Amazon’s identity was hidden until after the deal was awarded.

While other Tar Heel State tax break awards are transparent, for no reason we can discern, Big Tech enjoys full secrecy.

Google and Apple have had data centers in the state for years, and presumably take advantage of the sales and use tax exemption. But they are smaller than the “hyperscale” projects like Amazon’s, and the race to dominate artificial intelligence is causing a data center construction frenzy.

The budget lessons from other states are sobering. Texas and Virginia are each now losing about $1 billion in tax revenue per year, according to studies conducted by Good Jobs First. Georgia lost $300 million in FY 2025.

Localities are losing tens of millions as well. Lenoir in Caldwell County has had a Google data center for many years. Google paid about $78 million in property tax to the county between 2013 and 2025, the county revealed through an information request. But under an agreement made when Google first arrived, the county has so far rebated nearly $73 million of that to the company.

Proponents of data centers also cite new jobs. Yet, as the Amazon agreement in Richmond County shows, it promises to create only dozens of permanent jobs. That’s a far cry from the thousands of jobs the county used to have in textiles. As for the temporary construction phase, in years of national research, Good Jobs First has yet to see an agreement that requires a data center developer to hire locally in exchange for tax breaks.

So, if these companies pay no sales or property taxes and hire few local workers, how will this economic boom occur?

If data centers’ voracious appetite for energy drives up electricity rates, that will harm families and small businesses — and make the state less competitive in attracting industries that actually do employ many people.

Tax carveouts and giveaways to data centers threaten to harm the state’s budget and disrupt its economy. Taxpayers have the right to know how many of their tax dollars are being used to subsidize the special treatment of tech giants that will put a strain on state and local budgets and infrastructure.

Greg LeRoy directs Good Jobs First, a national watchdog group on economic development incentives. Brian Balfour is the Senior Vice President of Research at the John Locke Foundation.

This story was originally published August 7, 2025 at 3:05 PM.