PILOT (payment in lieu of taxes)
A payment in lieu of taxes is an agreement under which a project makes negotiated payments to a local government instead of, or in place of part of, normal property taxes. For data centers, PILOTs are often used to provide predictable tax costs over many years in exchange for investment and jobs. Availability, structure and approval steps vary by state and locality.
The full guide · Zoning, permitting & communityData Center Tax Incentives: What to Look ForHow data center tax incentives work: sales and use tax exemptions, property tax abatements, PILOT agreements, typical qualifying criteria and what to check.Where PILOT comes up
- Land & site fundamentalsHow Data Centers Are Taxed: Property Taxes, Abatements and PILOTs
- Land & site fundamentalsGround Leases for Data Centers: Terms, Rent, Financing and Reversion
- Markets & economicsThe Economic Impact of Data Centers on Communities: Taxes, Jobs and the Evidence
- Decisions and trade-offsTax Incentives vs. Power Costs: Which Matters More for a Data Center Site?
- Guides by roleData Centers: A Guide for County Officials and Planners
- Site selection by stateData Center Site Selection in Kentucky
- Site selection by stateData Center Site Selection in New York: NYISO, Hydropower and the 2026 Permit Pause