Wyden proposes raising taxes on data centres as counties and cities vote for moratoriums

Senator Wyden, the top Democrat on the Senate Finance Committee, has unveiled a plan to raise taxes on data centres¹. He also wants to strip the fast-growing facilities of several federal tax breaks¹.

The proposal comes as local governments act on their own. The Grant County Commission approved an ordinance on Thursday banning the development of data centres². Berea City Council approved a data centre moratorium³, and Grand Junction in western Colorado approved one as well⁴.

San Diego leaders are pushing for a temporary data centre moratorium and stronger safeguards while a potential 400-megawatt facility is considered for the NAVWAR site⁵.

Not every community is moving in the same direction. A small city in northern New Mexico voted on Tuesday to delay a decision on a moratorium after signing a memorandum of understanding with a data centre developer earlier this year⁶.

Why it matters to investors

Wyden’s plan would hit data centres from two sides: higher taxes and the loss of federal tax breaks the industry now relies on¹. Coming from the top Democrat on the Senate Finance Committee, the proposal sets out a marker for how his party could treat the sector¹.

Local moratoriums work on a different lever, by halting new development rather than raising its cost^2,3. Each ban or pause removes potential sites at a time when developers are seeking large amounts of capacity, such as the 400-megawatt project under discussion in San Diego⁵.

Taken together, the federal proposal and the local votes show opposition to data centres operating at several levels of government at once^1,4. For companies building or financing AI infrastructure, that adds to the uncertainty over where facilities can be built and what they will cost to run^2,5.

The New Mexico case shows the counterweight: communities that have already signed agreements with developers face pressure to keep those projects moving⁶.

What to watch

Whether other Democrats on the Senate Finance Committee back Wyden’s plan will indicate whether it can become a party position rather than a single senator’s proposal¹.

San Diego’s decision on a temporary moratorium, and the fate of the 400-megawatt NAVWAR proposal, will be an early test in a large market⁵.

The New Mexico city’s postponed vote will show whether a signed memorandum with a developer is enough to hold off a moratorium⁶. Further county and city votes like those in Grant County, Berea and Grand Junction would confirm that local resistance is spreading^2,3,4.