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In our last several updates, we highlighted the growing pressure on state and local governments as taxpayers increasingly question rising property tax burdens driven by elevated valuations, expanding local budgets, and persistent inflationary costs.

We also noted that taxpayers have a direct opportunity to influence their assessments through the open roll review and appeal process. With those values now largely finalized for the year, attention has shifted to the other major component of the property tax equation: the millage (tax) rate.

As local taxing bodies complete their budgeting cycle, they must determine what millage rate is necessary to fund operations given the finalized tax base. While factors such as community growth, infrastructure demands, public safety needs, and long-term obligations all influence budget requirements, determining what constitutes a reasonable millage adjustment is often subjective and, too often, insufficiently examined or explained.

With the enactment of Louisiana Revised Statute 47:305.73, the state has taken significant steps to incentivize the development of data centers. The statute provides a state and local sales and use tax exemption for eligible data center equipment, software, and certain construction and development costs.

However, while the exemption provides substantial opportunity, there are still questions regarding the practical application of the statute.

Under R.S. 47:305.73, an “approved data center facility” is defined as a facility located in Louisiana that is certified by Louisiana Economic Development (LED). To qualify, the operator must attest that the project will create a minimum of 50 new direct, permanent jobs and expend at least $200 million in new capital investment in Louisiana between July 1, 2024, and July 1, 2029.

As discussed in our last legislative post, Colorado was the first state to call a special session to address the effects of the One Big Beautiful Bill Act (“OBBBA”). Since then, many states have either passed legislation or issued guidance to address its conformity or nonconformity to H.R. 1, the OBBBA.

Delaware called a special session on October 31, 2025, to address a potential multi-year revenue loss from rolling conformity to federal tax cuts under the OBBBA. On November 19, 2025, Governor Matt Meyer signed H.B. 255 to decouple from certain corporate tax provisions in the OBBBA. Specifically, the bill decouples from the following: (1) expensing for domestic research and experimental expenditures made after December 31, 2021, but on or before December 31, 2024, to continue expensing in effect immediately before enactment of the OBBBA; (2) for property acquired and placed in service after January 19, 2024, and before January 1, 2031, to continue amortization and depreciation under the IRC in effect immediately before the enactment of the OBBBA; and (3) for qualified production property placed in service before January 1, 2031, to continue amortization and depreciation under the IRC in effect immediately before the enactment of the OBBBA. 

During its fall veto session, the Illinois legislature passed S.B. 1911 to decouple from the OBBBA’s full immediate bonus depreciation for qualified property and expensing for qualified production property. In addition, S.B. 1911 will modify the Illinois statutory definition of Global Intangible Low-Taxed Income (GILTI) to Net Controlled Foreign Corporation Tested Income (NCTI), consistent with the modification in the OBBBA. The state will tax 50% of income recognized pursuant to IRC Section 951A, regardless of whether it is GILTI or NCTI, for taxable years ending on or after December 31, 2025. S.B. 1911 is pending the governor’s signature.

Below are some of the state incentives offered to data centers in the Southern US:• Alabama: Tiered sales and property tax abatements lasting 10–30 years depending on capital investment levels from $200M to over $400M.• Arkansas: Full sales and use tax exemption for data center investments of $100M+. Enhanced exemptions for mega-projects of $2B+ and significant payroll.• Florida: Sales and use tax exemption for data centers investing $150M+ with at least 15MW of critical load; certificate and reporting requirements apply.