Arizona Commerce Authority; Computer Data Center Tax Relief; Moratorium; Retroactivity; Delayed Repeal (Laws 2026, Chapter 140, Sec. 31)

two-reviewer statute enacted az-hb4168-2026-cdc-moratorium

Record created 2026-08-21, last updated 2026-08-21. Snapshot built September 14, 2026. JSON

State

AZ

Kind

statute

Status

enacted

Agency

Arizona Commerce Authority

Citation

House Bill 4168, "taxation; omnibus; 2026-2027," 57th Legislature, 2nd Regular Session (2026), enacted as Laws 2026, Chapter 140, Sec. 31, signed by Governor Katie Hobbs June 13, 2026 as part of the FY2027 budget package

Effective

2026-07-01

Sunset

2029-06-30

Mandatory

True

Summary

H.B. 4168, an omnibus taxation bill carrying the Legislature's FY2027 budget-implementation tax provisions, was signed by Governor Katie Hobbs on June 13, 2026 as Laws 2026, Chapter 140. Section 31 of the Act imposes a three-year moratorium (July 1, 2026 through June 30, 2029) barring the Arizona Commerce Authority from accepting NEW applications for the computer-data-center TPT/use-tax exemption under A.R.S. § 41-1519 (see companion instrument az-ars-41-1519-cdc-tax-relief) and barring any new computer data center from qualifying for that relief during the moratorium window; the moratorium repeals itself automatically after June 30, 2029 (a 'delayed repeal' per the section's own title) unless further legislative action intervenes. This was the compromise outcome of a fight the Arizona Legislature's own reporting corps (Arizona Capitol Times) described as dominating the 2026 session: Governor Hobbs's executive budget had proposed eliminating the data-center tax exemption entirely, following what the same reporting describes as 'intense backlash in 2025 against proposed data center projects in Tucson, Chandler and Marana'; legislative Republicans opposed outright elimination; the enacted compromise pauses rather than repeals the program. Governor Hobbs, quoted by Arizona Capitol Times taking questions from reporters July 7, 2026: "I think that this pause in the exemption gives us a chance to really examine the policies ... Nobody's talking about a moratorium on data centers themselves. There are places where they make sense, where they provide economic opportunity and where they're not sucking the groundwater and overtaxing the utilities." Separately reported (same Arizona Capitol Times piece, and corroborated by independent aggregator search results not independently re-fetched this tick): a surge in last-minute applications to beat the June 30, 2026 cutoff, which this collector did NOT independently verify against an Arizona Commerce Authority primary count this tick (see notes).

Cost allocation

PRIMARY (raw session-law PDF, azleg.gov/legtext/57leg/2R/laws/0140.pdf, fetched directly and text-extracted with PyMuPDF - born-digital text, no OCR needed). Sec. 31, in full: "Arizona commerce authority; computer data center tax relief; moratorium; retroactivity; delayed repeal A. Notwithstanding any other law, beginning on July 1, 2026 through June 30, 2029, the Arizona commerce authority may not accept applications for any new computer data center pursuant to section 41-1519, Arizona Revised Statutes, and no new computer data centers qualify for tax relief under section 41-1519, Arizona Revised Statutes. B. This section applies retroactively to from and after June 30, 2026. C. This section is repealed from and after June 30, 2029." (CORRECTED AT THE 2026-08-24 GATE: an inserted period after the section heading, 'delayed repeal.', has been removed - the enrolled heading carries no terminal period. The statute's own internal cross-reference in subsection B, 'applies retroactively to from and after June 30, 2026,' is reproduced exactly as it appears in the enrolled text, including its redundant 'to from and after' phrasing - not a transcription error by this collector.)

• Laws 2026, Chapter 140 (House Bill 4168), enacted session-law text statute two-reviewer

  “Sec. 31. Arizona commerce authority; computer data center tax relief; moratorium; retroactivity; delayed repeal A. Notwithstanding any other law, beginning on July 1, 2026 through June 30, 2029, the Arizona commerce authority may not accept applications for any new computer data center pursuant to section 41-1519, Arizona Revised Statutes, and no new computer data centers qualify for tax relief under section 41-1519, Arizona Revised Statutes. B. This section applies retroactively to from and after June 30, 2026. C. This section is repealed from and after June 30, 2029.”

  Sec. 31 (session-law PDF pages 51-52, printed 'H.B. 4168 - 51 -')
  https://www.azleg.gov/legtext/57leg/2R/laws/0140.pdf
  Fetched directly via curl (Chrome 126 UA) from azleg.gov, born-digital PDF, text extracted with PyMuPDF, no OCR needed. Header confirms 'CHAPTER 140 / HOUSE BILL 4168'; 'H.B. 4168' repeats in the running header on every page. QUOTE CORRECTED AT THE AZ GATE: the stored string inserted a period after the section heading ('delayed repeal. A.'); the enrolled text carries no terminal period on the heading. TWO LEGISLATURE-PDF ARTIFACTS, not defects: azleg.gov's chapter print injects margin line numbers on their own lines mid-sentence, and the section spans a page break where the running header 'H.B. 4168' and the page rule '- 51 -' fall between subsection A and subsection B. Verbatim once standalone numeric lines and those two header lines are stripped - the same class as the MO/TX/IN/KS gates' legislature-PDF artifact, now five gates running. Subsection B's redundant 'applies retroactively to from and after' is the enrolled text's own wording.

• Laws 2026, Chapter 140 (House Bill 4168), enacted session-law text - enactment stamp statute two-reviewer

  “APPROVED BY THE GOVERNOR JUNE 13, 2026. FILED IN THE OFFICE OF THE SECRETARY OF STATE JUNE 13, 2026.”

  final page (PDF p.54, printed 'H.B. 4168 - 53 -')
  https://www.azleg.gov/legtext/57leg/2R/laws/0140.pdf
  ADDED AT THE AZ GATE. The instrument's own notes recorded the June 13, 2026 signing date as 'NOT independently verified this tick', taken from secondary characterization. The stamp is on the last page of the session-law PDF the collector had already fetched and text-extracted. Born-digital, PyMuPDF, no OCR.

• Data centers dominated 2026 session - lawmakers answered with 3-year tax incentive pause journalism two-reviewer

  "I think that this pause in the exemption gives us a chance to really examine the policies," Hobbs said. "Nobody's talking about a moratorium on data centers themselves. There are places where they make sense, where they provide economic opportunity and where they're not sucking the groundwater and overtaxing the utilities."

  quote attributed to Gov. Katie Hobbs, July 7, 2026 press remarks
  https://azcapitoltimes.com/news/2026/07/09/data-centers-dominated-2026-session-lawmakers-answered-with-3-year-tax-incentive-pause/
  Arizona Capitol Times, fetched directly via curl (Chrome UA), HTTP 200. Same article's background section states the moratorium originated in Gov. Hobbs's executive budget proposal to eliminate the exemption entirely, opposed by legislative Republicans, resulting in the enacted pause-not-repeal compromise; also reports Hobbs separately signed a bill (unidentified bill number this tick) imposing new utility reporting requirements for data-center grid interconnections, and vetoed a bill related to a Marana data-center ballot-referral dispute - neither independently investigated as instruments this tick.

• Data centers dominated 2026 session - lawmakers answered with 3-year tax incentive pause journalism two-reviewer

  “After intense backlash in 2025 against proposed data center projects in Tucson, Chandler and Marana, Hobbs advocated eliminating the tax incentives entirely in her executive budget proposal. Republicans were vehemently opposed to the idea, arguing it would slow economic growth and send the wrong signal to potential investors. Ultimately, a compromise resulted in the temporary moratorium set to lift in 2029 if the incentives aren't completely eliminated in a future session.”

  background section, paragraphs on the origin of the moratorium
  https://azcapitoltimes.com/news/2026/07/09/data-centers-dominated-2026-session-lawmakers-answered-with-3-year-tax-incentive-pause/
  ADDED AT THE AZ GATE. The instrument's summary presented 'intense backlash in 2025 against proposed data center projects in Tucson, Chandler and Marana' as a direct quotation with no evidence row behind it, and asserted the executive-budget origin and the pause-not-repeal compromise unsourced. Re-fetched via curl (Chrome 126 UA), HTTP 200; azcapitoltimes.com served the full article body to a plain fetch and is not paywalled for this piece.