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In June, a new sales tax incentive went into effect in north Louisiana intended to pave the way for large-scale AI data centers to locate in the state.
Six months later, it can already declare success.
On Tuesday, state officials made what media has been reporting for weeks: Facebook parent Meta is planning to locate a 500-job data center in Richland Parish. The massive data center project in north Louisiana is described as having the potential to transform the regional economy.
It is characterized as a hyperscale generative AI data center focused on computing, not storage. It will be the first of its kind in Louisiana but is likely the tip of the spear, officials say.
The new tax incentive, combined with existing advantages in central and north Louisiana, could make the state a strong competitor for hyperscale data centers with significant power needs. It could represent a major win for rural parts of the state since tech companies and investors are poised to spend more than $1 trillion in the next few years in the race to expand the world’s AI infrastructure.
The new sales tax incentive targets large-scale projects with significant job creation. They differ from so-called edge data centers—smaller facilities that already exist in the state that are based on storage, not computing. Such centers are geographically located next to the populations they serve, while hyperscale computing data centers serve global customers no matter their location. Edge data centers that provide storage already exist in the Capital Region.
A possible data center project unrelated to the state’s north Louisiana announcement has been rumored to get off the ground soon in West Feliciana Parish.
At a Nov. 12 Parish Council meeting, Parish President Kenny Havard said that an announcement would be forthcoming about “a fairly significant data center” in the parish, according to The Advocate.
The newspaper also reported that Havard has said nondisclosure agreements keep him from revealing specifics, but he offered that publicly traded companies are involved, and it would be built “next to the paper mill” off La. 964 in the southern end of the parish.
The state incentive is meant to give Louisiana an advantage in attracting worldwide investment. It requires companies to create at least 50 jobs and spend at least $200 million in capital.
“We moved pretty quickly in the spring to create an incentive program that would provide a sales tax rebate to AI data centers so that we were competitive,” says LED chief innovation officer Josh Fleig. “We didn’t have any sort of incentive program to try to attract these companies.”
More companies are seeing the Mississippi Delta states as a favorable location to set up shop, Fleig says. Louisiana tossed its hat in the ring with the 10% sales tax incentive, which will save millions for companies investing in the state.
“These projects spend so much money refreshing and replacing servers—the rate at which they burn through these things is just tremendous,” Fleig says. “So, if you can save up to 10% on sales tax, that’s significant for the cost of some of these really expensive projects.”
The incentive “has opened up the floodgates in terms of interest from the industry,” Fleig says.
According to economic development officials, computational data centers typically have not been associated with hurricane-prone states like Louisiana, but favorable weather in the central and northern parts of the state, along with other extant advantages have placed these regions in a strong position to attract new investment.
The area is not on a fault line, a key consideration for AI data centers, nor is it directly in the impact path of major hurricanes. It offers abundant dry, open rural land, and a supply of water that can be used for cooling equipment. Central and north Louisiana are also flush with available power, Fleig says.
“Our biggest utility companies in Louisiana are used to working on industrial-scale projects and serving major energy users,” he says. “That’s attractive to these hyperscalers.”
Only limited details have been released about Entergy’s relationship to the project, but Fleig confirmed that the company would build out capabilities to serve the new north Louisiana data center without passing the cost on to customers.
“The utilities are making major investments to their electric infrastructure,” Fleig says. “There will be massive upgrades to the electric utilities in Louisiana because of this.”
As for jobs, Fleig says Louisiana Delta Community College in Monroe is working on curriculum to support the workforce pipeline that will be required for the project as well as future investments. Many of the data center jobs will focus on keeping hardware running smoothly and will yield wages higher than average in Louisiana’s central and northern parishes.
The impact could be profound, says economist Loren Scott, who named data centers as potentially transformative for Louisiana in his 2025 economic forecast.
He says Louisiana could become a player in the rapidly expanding landscape of data centers. Currently, the country’s data center load is concentrated in only about 15 states—with Louisiana not among them. “It could be a game changer for parts of the state that really need it,” Scott says.
Scott points to natural gas as another advantage in north Louisiana.
“The nice thing about north Louisiana in particular, is it’s where the Haynesville Shale is,” Scott says. “So, there’s just an ocean of gas there for power plants to use to generate electricity.”
Fleig says that the December announcement will bring a significant economic bounce to a part of the state that has often struggled to attract large-scale projects.
“The community impact will be profound in a positive way,” Fleig says. “If you look at the job counts, they’re much higher than traditional data centers. And the pay levels in some cases are two and three times the average in those parishes. These are indoor, air-conditioned, professional jobs that will drive more income and create more opportunity for people in rural places.”
Other projects are in the works beyond the December announcement.
“The rebate program makes us ultracompetitive. It’s something not a lot of states have, certainly to this scale,” Fleig says. “I think we will very quickly become one of those competitive states, certainly in the Southeast if not the country.”
