U.S. Sen. Josh Hawley of Missouri has introduced federal legislation aimed at preventing data centers from receiving certain tax benefits, a move that could affect potential large-scale developments across the state, including a project under consideration in Joplin. Hawley introduced the "No Tax Breaks for Data Centers Act" on Thursday.
The bill targets federal Opportunity Zone tax benefits, which are designed to encourage private investment in economically distressed communities. These zones allow investors to defer or reduce capital gains taxes by investing in qualifying projects. Congress made the Opportunity Zone program permanent in 2025, with a new round of designations scheduled to begin in 2027. Hawley argues that large technology companies do not require these incentives to construct data centers. His proposed legislation would specifically exclude data centers from the definitions of qualifying Opportunity Zone businesses and property, while maintaining the program for other eligible projects.
Research conducted by the National Community Reinvestment Coalition indicates that approximately 14% of existing U.S. data centers are located within Opportunity Zones. This percentage rises to 17.3% among projects that have been approved, permitted, or are currently under construction.
Hawley's legislative effort comes as Joplin continues to prepare for the possibility of a major data center development. The proposed site is located at Wildwood Ranch on the city’s west side. Earlier this year, about 600 acres near West 20th Street and Central City Road were annexed into the city and rezoned for heavy industrial development. Joplin officials have stated that the landowner indicated the potential project would be a "hyperscaler," a term generally applied to facilities owned by some of the world's largest cloud and technology companies. City officials have emphasized that a data center at this location is not yet a certainty. The project still requires completion of various studies, including those on electricity, water, and environmental impacts, before construction permits can be issued.
In August, Joplin approved new regulations specifically for data centers. These regulations include a 600-foot setback requirement from certain residential and public properties, mandates for closed-loop cooling systems, specific noise standards, and provisions requiring developers to cover the costs of utility infrastructure needed specifically for their projects.
The direct impact of Hawley's new federal bill on the potential Wildwood Ranch proposal in Joplin is not yet clear. The federal restriction would only apply if the project were to be situated within a qualifying Opportunity Zone and if investors sought to utilize that particular program. Missouri is currently working through a new round of Opportunity Zone designations, which will cover the period from 2027 through 2036.
There is another important distinction for the city of Joplin regarding data center incentives: Hawley’s proposed federal legislation would not affect or eliminate Missouri’s separate Data Center Sales Tax Exemption Program. Under state law, a qualifying new data center can receive a 100% exemption from state and local sales and use taxes. This exemption applies to certain construction materials, equipment, computers, utilities, and other related expenses for a period of up to 15 years.
Hawley’s new bill is part of a broader ongoing effort concerning the costs associated with data centers. Previously, he introduced bipartisan legislation alongside Sen. Richard Blumenthal of Connecticut. That earlier bill was designed to prevent large data centers from shifting the costs of electricity infrastructure onto residential utility customers. The debate over the public costs and benefits of large-scale technology facilities continues at both federal and local levels, with implications for communities like Joplin considering such developments.
