Tax & Fiscal Policy Foundations for AI Infrastructure

Glossary

Clawback

A contractual right allowing a government to recover previously granted tax benefits if the recipient fails to meet agreed investment, employment, or timeline commitments.

Clean-electricity credits

Federal tax credits rewarding investment in and generation from low-carbon power, which improve the economics of generation projects contracted to serve data-center load.

Global minimum tax

An OECD-coordinated framework establishing a fifteen-percent minimum effective tax rate on large multinationals, with top-up mechanisms when profit is taxed below the floor.

PILOT (payment in lieu of taxes)

An arrangement in which a project makes negotiated, scheduled payments to a locality instead of paying ordinary property tax, often structured through a development authority that holds title.

Property-tax abatement

A negotiated reduction, deferral, or elimination of the recurring annual property tax on a facility's assessed value for a fixed term, used by localities to attract capital-intensive projects.

Real-estate investment trust (REIT)

A company owning income-producing real estate that largely avoids entity-level tax by meeting strict asset rules and distributing most of its taxable income to shareholders.

Sales-and-use tax exemption

Relief from the one-time tax on purchased equipment such as servers and networking gear, typically conditioned on investment and job thresholds.

Tax increment financing (TIF)

A mechanism that earmarks the future incremental tax revenue from new development in a defined district to repay bonds financing the infrastructure that serves it.