Josh Hawley targets data center tax loophole, calling it corporate welfare

A Republican senator is trying to close a tax break that he says has handed Silicon Valley a quiet subsidy for years. Sen. Josh Hawley of Missouri plans to introduce legislation that would bar data centers from claiming Opportunity Zone tax incentives, a provision originally created to funnel private capital into economically distressed communities. The timing matters. Hawley announced the move on September 16, 2026, the same day House Democrats unveiled their own separate bill targeting data center access to federal incentives. What the loophole actually does Opportunity Zones were created under the 2017 Tax Cuts and Jobs Act, the signature fiscal legislation of the first Trump administration. The basic idea was reasonable: give investors a capital gains tax break if they put money into businesses operating in low-income areas that would otherwise struggle to attract private investment. What the program did not anticipate, or at least did not explicitly prevent, was major tech firms using those same incentives to build sprawling server complexes. According to an analysis by the National Community Reinvestment Coalition, roughly 14% of existing data centers are already situated ins...