Data Center Community Investment Tax Credit Act of 2026

This Act establishes a federal tax credit for qualified data center investments in designated Opportunity Zones or low-income communities, as defined by the Secretary of the Treasury in coordination with the Department of Commerce. The credit is equal to 20% of qualified capital expenditures, capped at $50 million per project, and is available for projects that begin construction before December 31, 2031. To qualify, a data center must enter into a community benefit agreement with the local government, which may include commitments to local hiring, workforce training, and infrastructure improvements. The agreement must be filed with the Secretary of Commerce and made publicly available. No federal funds may be used to condition state or local zoning decisions; the credit is purely a federal tax incentive. The credit is funded by a 0.1% surcharge on the gross receipts of data center operators with annual revenues exceeding $1 billion, collected by the Internal Revenue Service. The surcharge sunsets five years after enactment. The Government Accountability Office shall conduct a study every two years on the economic and environmental impacts of the credit, with a report to Congress. Enforcement is through IRS audit and recapture of credits if a project fails to maintain operations for at least five years or violates the community benefit agreement. The Secretary of the Treasury may issue regulations to prevent abuse.