Data centers located along Utah's Silicon Slopes corridor may provide homeowners with short-lived property tax breaks that reverse within a few years, according to University of Utah research released in August.
A Kem C. Gardner Policy Institute study describes this phenomenon as a boomerang effect. Under Utah's Truth in Taxation system, a new data center's building initially lowers the certified tax rate for surrounding property owners because it counts as new construction.
While the building provides an initial tax reduction, the center's personal property, such as servers and GPUs, depreciates rapidly and does not count as new growth. This equipment can be worth three to four times the value of the building itself. As the equipment loses value, the tax rate may creep back up.
Maddy Oritt, the director of public finance research at the Gardner Institute and a study co-author, told Deseret News that this effect is most significant in rural counties with small tax bases. For example, a $2 billion data center would represent approximately 1% of Salt Lake County's tax base, but it would more than double the tax base of San Juan County.
The study also noted that data centers located within tax increment financing zones generate no new revenue for local taxing entities during a project's duration, as that revenue is used to fund the development project itself.
Regarding utility impacts, Shon Hiatt, an associate professor at the University of Southern California, told a Utah legislative interim committee on Aug. 19 that while investor-owned utilities like Rocky Mountain Power saw no rate impact from data centers between 2020 and 2025, larger data centers arriving now may impact wholesale power prices.
Utah's 2025 Senate Bill 132 addresses some of these risks by allowing companies requiring 100 megawatts or more to construct their own off-grid generating stations. Michele Beck, the director of Utah's Office of Consumer Services, described the bill as one of the best national ideas for protecting power customers.
Data center construction continues to accelerate in the state. As of late 2025, Utah had 47 facilities consuming nearly 600 megawatts of power, with near-term growth in the Salt Lake region estimated at 699%.
The Legislature's Economic Development and Workforce Services Interim Committee held presentations on this issue on Aug. 19, though no follow-up hearing date has been announced.
