Nevada Data Centers Must Now Pay School Taxes to Get a Tax Break

Nevada Gov. Joe Lombardo signed Executive Order 2026-005 on September 18, setting what his office calls the Nevada Standard for Responsible Data Center Development. Under the order, a data center application seeking a partial tax abatement cannot go before the board of the Governor's Office of Economic Development, or GOED, unless the developer agrees to pay the Local School Support Tax in full and signs a binding Community Support Commitment. "Data centers can be an unprecedented opportunity for Nevada, but if companies want to build here, they need to play by our rules," Lombardo said.

The order reworks an abatement program the Legislature created in 2015 without protections for energy and water use. A 2025 change gave the GOED Board authority to deny applications, reduce abatements, or attach conditions. Nevada has 76 data centers planned or built, and the state has granted about $461 million in expected data center tax breaks over the past 11 years, according to Carson Now. Since the 2025 changes, the board has approved roughly $50 million in projected incentives.

The Community Support Commitment is negotiated by GOED's executive director with the State Engineer, the Public Utilities Commission of Nevada, other state agencies, local governments, and school districts. At minimum, developers must meet local water standards, cover the cost of providing utility service to their facilities rather than shifting it to other ratepayers, and commit not to impede the public's ability to receive electricity during a grid emergency. The order also directs a Responsible Speed to Power Plan identifying the electrical facilities Nevada will need through 2036.

For electrical crews, the grid-emergency commitment is the provision most likely to reach the drawings. The order does not prescribe equipment, but a pledge to stay off a stressed grid is typically met with on-site generation, load-shedding controls, and transfer schemes that let a campus carry itself. The cost language works differently: substations and lines built to serve a campus are still built, but the developer, not other utility customers, pays for them.

The order sets no apprenticeship, local-hire, or prevailing-wage requirement. That separates it from Pennsylvania's Executive Order 2026-05, signed August 18, which conditions state permit review on developer commitments that include hiring local workers. Nevada ties its incentive to school taxes and utility costs instead, leaving labor terms to each project and existing state law. Lombardo said the order opens the door to "billions in responsible investment, good-paying jobs, and long-term economic growth for Nevadans." Attorney General Aaron Ford called it "a last-ditch excuse for an executive order."

The order took effect immediately, and every data center abatement application that now reaches the GOED Board carries the new conditions. Until the Speed to Power Plan is published, the commitments negotiated project by project will define what each Nevada campus owes the grid, and which side of the meter pays for the work.