Oregon Considers 1-Year Pause on Data Center Tax Breaks

Lawmakers vote to halt new incentives as they study industry's impact on economy, environment, and energy supply.

Published on Mar. 2, 2026

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Oregon lawmakers have voted to adopt a one-year moratorium on awarding new tax breaks for data centers through the state's largest incentive program. The move comes as the state looks to study the industry's impacts on Oregon's economy, environment, and energy supply before the 2027 legislative session. While existing data centers will still receive tax breaks, the moratorium would prevent new centers from accessing the lucrative property tax incentives.

Why it matters

Data centers are a major industry in Oregon, collecting over $450 million in tax breaks this year. However, there are growing concerns about their impact, including their substantial energy usage (11% of the state's electricity) and potential to trigger localized blackouts, as well as their consumption of scarce water and industrial land resources. The moratorium aims to give lawmakers time to carefully evaluate the costs and benefits of these incentives before deciding whether to continue them.

The details

The one-year moratorium would make new data centers ineligible for property tax breaks through Oregon's enterprise zone program, which is currently saving the industry over $370 million per year. However, data centers already receiving tax breaks will still collect them, and the moratorium does not apply to a separate incentive program that will save the industry an additional $80 million this year. The tech industry and some rural lawmakers objected to the moratorium, but it was ultimately approved by a legislative subcommittee and appears likely to pass the full legislature.

  • The legislative subcommittee voted on Monday to approve the one-year moratorium.
  • The full House and Senate are expected to vote on the moratorium this week before the legislative session ends on Saturday.

The players

Tina Kotek

The Governor of Oregon who had been pushing to expand data center tax incentives, but now faces a potential one-year pause on new incentives.

Nancy Nathanson

A Democratic state Representative from Eugene who said 'Let's take a pause, let's consider all the factors and come back and consider this next year.'

Mike McLane

A Republican state Senator from Powell Butte who argued that local county commissioners should maintain discretion over enterprise zone tax incentives.

Catherine Thomasson

A lobbyist for Mobilizing Climate Action Together who told lawmakers 'Data centers should not get huge property tax breaks in Oregon.'

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What they’re saying

“'Let's take a pause, let's consider all the factors and come back and consider this next year.'”

— Nancy Nathanson, State Representative (oregonlive.com)

“'My commissioners would like to maintain their discretion over enterprise zones. Once again, disputes in the Willamette Valley are like a rock in a mud puddle. And it splashes those of us who live east of the mountains. I'm growing weary of this.'”

— Mike McLane, State Senator (oregonlive.com)

“'Data centers should not get huge property tax breaks in Oregon. I want the electricians to have jobs, too, but we don't need to give away our money.'”

— Catherine Thomasson, Lobbyist (oregonlive.com)

What’s next

The full House and Senate are expected to vote on the one-year moratorium this week before the legislative session ends on Saturday. If approved, the moratorium would take effect immediately, halting new data center tax breaks while a state workgroup studies the industry's impacts.

The takeaway

Oregon's move to pause new data center tax incentives reflects growing concerns about the industry's strain on the state's energy grid, water resources, and land use. The one-year moratorium aims to give lawmakers time to carefully weigh the costs and benefits before deciding whether to continue the lucrative tax breaks that have attracted major tech companies to the state.