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Bill

SB 2222

Relating to an exemption from ad valorem taxation of the total appraised value of real property used as a data center and the tangible personal property used by the data center to meet the data center's demand for energy.

89th Legislature (2025) Introduced by Tan Parker

Texas bill exempts data centers and their energy equipment from property taxes, benefiting operators while reducing local government revenues from a major industrial sector.

Referred to Local Government
#energy--general(i0315) #propertyinterests--personalproperty(i0600) #taxation--property-appraisals&appraisaldistricts(i0792) #taxation--property-assessment&collection(i0798) #taxation--property-exemptions(i0793) #taxation--sales(i0800)
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Bill Summary · SB 2222

Legislative bill overview

SB 2222 proposes to exempt data centers in Texas from ad valorem (property) taxes on both the real property where they operate and the tangible personal property they use to generate or manage their own energy. This would apply to the total appraised value of these assets, representing a significant tax break for data center operators in the state.

Why is this important

Data centers consume enormous amounts of electricity and represent substantial capital investments. Tax exemptions can influence where companies locate data infrastructure, potentially attracting major tech investments to Texas but also reducing local tax revenue. As AI and cloud computing demand grows, states are competing aggressively for data center facilities through tax incentives.

Potential points of contention

  • Local revenue impact: Cities and counties rely on property tax revenue for schools, emergency services, and infrastructure; exempting major industrial facilities shifts this burden to other taxpayers
  • Selectivity concerns: Creating tax breaks for specific industries raises fairness questions about why data centers receive preference over manufacturing, agriculture, or other economic sectors
  • Cost-benefit clarity: The bill lacks analysis of how much tax revenue would be foregone versus economic benefits (jobs, infrastructure investment) the data centers would generate
  • Energy infrastructure: Exempting energy generation equipment may reduce incentives for data centers to invest in efficient or renewable energy systems

Compiled from official sources — confirm details with the bill’s official record.

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