Nevada will no longer hand data center developers a state tax abatement unless they agree to pay the school tax the abatement was waiving. Gov. Joe Lombardo signed Executive Order 2026-005 on Sept. 18, creating what his office calls the Nevada Standard for Responsible Data Center Development and attaching conditions on water, electricity costs and grid reliability to every application that reaches the state’s economic development board.
The change is procedural, and that is what gives it force. Under the order, a data center application seeking a partial tax abatement “cannot be brought before the GOED Board” β the Governor’s Office of Economic Development board that grants the incentives β unless the developer has agreed to pay the Local School Support Tax in full and has executed a binding Nevada Community Support Commitment. Developers do not get a hearing without signing first.
“I promised Nevadans that data centers would be developed responsibly with the community’s interest in mind. Today, we’re delivering on that promise,” Lombardo said in the announcement. “This executive order establishes a standard that data center developers must follow if they are going to build in Nevada. They must pay their share, protect our water resources, keep costs from being passed on to ratepayers, and protect the communities that host them.”
What the commitment requires
The Community Support Commitment will be written by the executive director of GOED in consultation with the State Engineer, the Public Utilities Commission of Nevada, other state agencies, local governments and school districts. The governor’s office set a floor for what it must contain: developers have to meet local water standards, cover the cost of serving the facility so those costs are not passed to ratepayers, and ensure the project does not strain the electrical grid or the surrounding community during emergencies.
The order also binds the state. It directs a Responsible Speed to Power Plan identifying the generation and transmission facilities needed to serve the large loads anticipated through 2036, on the condition that no costs are passed on to Nevada ratepayers.
Rewriting an 11-year-old incentive
Nevada’s data center abatement dates to 2015 legislation that, as the governor’s office describes it, required GOED to grant abatements to any project clearing statutory employment, wage and investment thresholds β “with no protections for energy and water use and no flexibility to deny those abatements.” The board was, in effect, a rubber stamp.
That started to change in 2025, when the Legislature gave the GOED board authority to deny an application, approve it for a smaller amount, or impose conditions. The executive order builds on that new discretion by setting the conditions in advance rather than leaving them to a case-by-case vote.
The school-funding piece explains the framing. The Local School Support Tax is the portion of Nevada’s sales and use tax that flows to K-12 education, and it has been among the largest abated components of the data center package. Local governments have foregone roughly $236 million in school support taxes because of data center abatements, more than under any other Nevada tax break program, according to an analysis by The Nevada Independent. “This executive order puts money back into our schools that otherwise would have been lost under outdated state law,” Lombardo said.
A third model for states courting the load
Nevada is now the latest state to attach conditions rather than choose between courting data centers and banning them. Virginia regulators ordered data centers to pay for dedicated transmission infrastructure, Texas ordered an audit of more than 1,800 data centers before grid hookups, and a growing list of counties has gone the other way with outright moratoriums. Lombardo’s order is closer to the first approach: it keeps the door open while pricing the externalities.
For developers and the industrial landowners who assemble sites for them, the practical questions are timing and cost. A commitment negotiated with the State Engineer, the PUCN, a county and a school district is another sequence to run before an abatement vote, and it lands on projects whose economics already depend on speed to power. The announcement sets out no project cap or megawatt threshold, and it is written to govern applications rather than abatements already granted.
Whether it cools Nevada’s pipeline is an open question. Lombardo’s own framing is that it will not: the standard, he said, sets “clear expectations while opening the door to billions in responsible investment, good-paying jobs, and long-term economic growth for Nevadans.” That claim will be tested by the next application to reach the GOED board.
Polling this year has put local opposition to nearby data centers at 69%, and the fight has been migrating from county commissions to statehouses all year. Nevada’s order is the version of that pressure that still leaves the industry a path forward.
