Arizona and Illinois Impose Data Center Tax Moratoriums Effective July 1; 300+ Data Center Bills Filed in 30+ States in 2026

Arizona enacted a three-year moratorium on its data center sales-tax exemption beginning July 1, 2026 (running through June 30, 2029), and Illinois Governor JB Pritzker suspended new-development incentives effective the same date. Texas’s governor separately directed the Public Utility Commission to ensure data centers pay full infrastructure and interconnection costs so residential ratepayers are not burdened, while Virginia’s governor amended ratepayer-protection bills that critics say weakened them. Good Jobs First and MultiState document more than 300 data center bills filed across 30-plus states in 2026 — a policy shift from incentive-focused recruitment to regulatory oversight. Texas’s existing exemptions cost an estimated $1.3 billion per year and Virginia’s roughly $1.6 billion per year.

This is the state-legislative front of the data-center fiscal-capture pattern (2026-06-11–data-center-fiscal-capture-tax-exemptions-state-budgets-electoral-salience): the moment the cost-shift onto ratepayers and state budgets became electorally salient enough that even hosting states began clawing back the giveaways. It runs alongside the Texas PUC infrastructure-cost directive (2026-06-10–abbott-directive-puct-ercot-data-center-infrastructure-costs) and against the federal permitting-acceleration push (2025-07-23–eo-accelerating-federal-permitting-data-center-infrastructure), with the PJM record capacity auction (2025-11-01–pjm-capacity-auction-record-data-center-40-percent-costs) as the cost signal driving the backlash.