Landry Adds Data Center Tax Break Conditions for Future Louisiana Deals
LAFAYETTE, La. — Gov. Jeff Landry’s administration announced new requirements Thursday for data center developers seeking Louisiana’s sales tax exemption. The state will also call data centers “digital factories” from now on. The announcement came five days before the Nov. 3 election, and national polling shows most Americans oppose a data center in their area.
Louisiana Economic Development, or LED, is turning the exemption into an invitation-only program. Companies must file a detailed attestation covering eight areas before they receive it. The exemption keeps its name, the Data Center Sales and Use Tax Exemption, to match state law.
What the New Louisiana Data Center Requirements Cover
The eight areas begin with protecting ratepayers from project-related cost shifts and strengthening grid reliability. They also cover workforce and community investment, contributions to local tax bases, the use of natural resources, the state’s innovation economy, and transparency and accountability. Criteria include partnerships with universities and long-term commitments to local schools and nonprofits.
State law already requires a sworn attestation that a project will create at least 50 new direct, permanent jobs. Companies also must attest that they intend to invest at least $200 million in Louisiana between July 1, 2024, and July 1, 2029.
LED will review each submission with the Department of Conservation and Energy, the Department of Environmental Quality, the Public Service Commission and the project’s proposed energy provider. It is not clear how the state will decide whether a company has met the criteria. An LED spokesperson declined to answer questions Thursday.
Some of the state’s largest projects were certified for the exemption before the framework existed. LED’s announcement does not say whether the new requirements apply to them.
Why Louisiana Is Calling Data Centers Digital Factories
LED says the new name reflects the “broad range of digital goods and services” the facilities produce. LED Chief Innovation Officer Josh Fleig said the agency is following the federal government’s shift from “artificial intelligence” to “super intelligence” and from “data centers” to “digital factories.”
In a statement, Landry said the framework keeps Louisiana “at the forefront of the age of digital factories and super intelligence” while protecting “our citizens and communities.”
How the Louisiana Data Center Tax Break Got Here
The Legislature created the exemption in 2024 through House Bill 827. The bill cleared the House 83-4 and passed the Senate 35-0 before Landry signed it that June. State leaders have credited the exemption with helping land Meta’s Hyperion campus in Richland Parish. The project’s cost has grown from $10 billion to $50 billion.
Developers had claimed $39 million in exemptions as of mid-September, based on Louisiana Department of Revenue data. The total is expected to grow into the billions as Meta and other developers increase spending.
The June Executive Order Behind the Framework
Landry signed an executive order on June 25 giving LED 90 days to write the requirements. LED’s announcement says the framework was completed four months after the order. The order says a data center that raises energy prices across the grid should not qualify for the exemption unless its other benefits outweigh the higher costs.
The order followed reporting that Meta’s data center could cost residents $8 more a month on electric bills. That estimate centered on Entergy’s planned purchase of Cottonwood, a Texas power plant. A state regulatory consultant found the plant was needed only because of Meta’s project. Entergy has put the deal on hold indefinitely, and both Entergy and Meta denied the consultant’s report.
Public Service Commissioner Davante Lewis, D-Baton Rouge, called the governor’s event a “PR stunt.”
What National Polling and Other States Show
Gallup surveyed 1,000 adults March 2-18, with a margin of error of 4 percentage points. It found 71% oppose building an AI data center in their area, including 48% who strongly oppose it. In the same survey, 53% opposed a nuclear plant in their area.
In Texas, Gov. Greg Abbott, a Republican seeking reelection, ordered a halt on new data center connections to the state’s power grid Aug. 3 pending audits. On Sept. 21, he told environmental regulators to stop issuing permits for data center projects until those audits finish.
Where Louisiana Politics Stands on Data Centers
Landry, a Republican up for reelection next year, has remained one of the few elected officials openly championing data centers. Earlier this month, he sat in front of Hut 8’s data center under construction in West Feliciana Parish for an interview with a national business channel. He dismissed concerns about electricity and water use. “A lot of it is just not factual, it’s fictional,” he said.
Democratic Senate nominee Jamie Davis has made regulating data centers and artificial intelligence part of his campaign against Republican Julia Letlow. A Public Policy Polling survey released by Davis’s campaign showed Letlow at 41%, Davis at 37% and 22% undecided. It surveyed 518 registered voters July 21-22.
Public Service Commissioner Jean-Paul Coussan, R-Lafayette, told a crowd at a recent energy forum that developers have “absolutely failed on their communications.” He said nondisclosure agreements that have kept negotiations secret have “struck a chord” with voters. Coussan added that developers are now “doing a decent job of playing catch up.”
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