Data Centers Drive Long-Term Tax Gain Potential and Economic Growth in Odessa

Odessa doesn’t need to choose between supporting innovation and protecting taxpayers. Data centers offer both. These low-impact, high-value facilities generate millions in tax revenue, enhance infrastructure, and attract next-generation industries, without overburdening city services or residents.

Tax Revenue Without the Tradeoffs

The primary advantage of data centers is their ability to add to the tax base while drawing little from it. Compared to other commercial developments, data centers require minimal public services. That difference shows up on the bottom line.

In Loudoun County, Virginia, for every $1 in services that Loudoun County provides to data centers, the county receives $26 in tax revenue. Also, every dollar of data center tax revenue costs only four cents in services. Traditional commercial development can cost more than six times that amount. The result is a net fiscal benefit that helps fund schools, emergency services, and infrastructure improvements.

For Odessa, that means higher property tax revenue and sales tax collections, without increased demand on fire departments, road maintenance, or public utilities. When structured through properly calibrated abatements, the long-term tax gains far outweigh the short-term incentives.

Abatements Create Win-Win Outcomes

Texas law offers data centers sales and use tax exemptions on equipment, making the state a highly competitive location for data center businesses. Odessa can combine this with a strategic local tax abatement policy — phased in over time — to attract investment while securing long-term revenue.

These abatements are not giveaways. 

They are structured tools that defer a portion of property taxes during the development period, then deliver full tax value when the facility is operational. Over a 10- to 15-year horizon, this produces sustained public revenue that grows with capital reinvestment and facility expansion.

High Capital Investment, Higher Payoffs

Data centers don’t lease a few thousand square feet; they build $500 million to $1 billion campuses filled with high-value servers and infrastructure. That investment becomes taxable property.

For Odessa, even a single hyperscale facility could generate tens of millions in new tax revenue over its lifetime. This money can be reinvested into public schools, law enforcement, utility upgrades, and broadband expansion without new tax burdens on residents or small businesses.

Job Creation and Economic Ripple Effects

Each data center supports direct jobs in IT, security, and maintenance, and indirect jobs in construction, logistics, and professional services. The average multiplier is more than seven jobs supported per full-time data center employee.

In Texas, data center-related employment grew 38% from 2018 to 2024. Odessa has the skilled labor pipeline and infrastructure needed to capture a portion of that growth. As workforce programs expand, including those focused on fiber-optic and digital infrastructure training, Odessa’s ability to meet future demand strengthens.

Infrastructure Modernization at No Public Cost

Data centers often build their own infrastructure or partner on public-private upgrades. Fiber, roads, substations, and utilities improve, not just for the site, but for the surrounding area. That is a new capacity for residents and businesses without new tax levies.

Odessa can take advantage of this by aligning data center development with key industrial zones and existing utility corridors. This alignment minimizes permitting timelines, maximizes efficiency, and ensures every investment serves both the facility and the region.

Odessa’s Opportunity Is Now

Texas is a top-tier destination for data centers, and Odessa has the assets to compete: affordable land, strong grid access, reliable utility partners, and a clear commitment to economic diversification.

By proactively supporting data center development, Odessa positions itself for long-term fiscal health, including steady revenue, quality jobs, and infrastructure that supports the next generation of businesses.

For developers, utility partners, and site selectors ready to invest in a fiscally sound location, Odessa delivers scalable value and long-term returns. Contact the Odessa Development Corporation to evaluate site options and explore available incentives.