Financial Tools

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.