Meta avoids billions in federal taxes by classifying data centers as experimental, NYT finds

Meta has been classifying its massive data centers as research and experimentation facilities, a move that has allowed the company to shave billions off its federal tax bill. A New York Times investigation published in July 2026 laid out how the company’s sprawling AI infrastructure push comes paired with a sophisticated playbook for minimizing what it owes the government.

The centerpiece of the strategy is Meta’s Hyperion AI campus in Richland Parish, Louisiana, a facility projected to cost more than $50 billion and eventually support up to 5 gigawatts of computing capacity.

The Louisiana deal and Project Sucre

Meta didn’t waltz into Louisiana under its own name. The company set up the Hyperion project under the codename “Project Sucre,” operating through a Delaware shell company. That structure allowed it to negotiate with state officials while keeping the corporate brand at arm’s length during the early stages.

The deal it secured is eye-catching. Louisiana granted Meta a 20-year exemption on state and local sales taxes for data center equipment valued at roughly $3.3 billion. The state fast-tracked legislation to make it happen, and local utility Entergy committed to building out power infrastructure to support the campus.

In return, Meta has committed over $1 billion to local infrastructure and the project has created thousands of construction jobs.

The Hyperion campus is designed to cover a footprint spanning between 2,250 acres and 6 square miles.

The federal tax angle

At the federal level, Meta has been leveraging bonus depreciation provisions and classifying AI-related expenses as research and experimentation costs. These classifications allow the company to deduct billions in capital expenditures from its taxable income in the same year the spending occurs, rather than spreading the deductions over the useful life of the equipment.

The 2025 One Big Beautiful Bill Act expanded these provisions, giving companies like Meta even more room to offset their tax obligations through accelerated write-offs. The result: Meta’s federal tax expense dropped by nearly $7 billion year-over-year, according to the Times investigation.

Senator Elizabeth Warren took notice. On September 28, 2026, Warren and other lawmakers sent formal inquiries to Meta and several other large tech companies, demanding answers about their AI and data center tax deductions. The letters pointed to a broader trend that has Warren’s office alarmed: corporate tax receipts have fallen 25% even as corporate profits have continued to climb.

A growing backlash

Ohio has emerged as a bellwether for this backlash. The state recently paused new data center tax exemptions amid rising scrutiny over whether the incentives were delivering adequate returns for taxpayers.