Ohio Reconsiders Data Center Tax Breaks Amid AI-Driven Power Concerns

Ohio is reconsidering its data center tax breaks, which have topped $1.5 billion in value since 2025. This exceeds the state's original estimate by more than tenfold. The decision comes as lawmakers push for new taxes and higher contributions toward power and electrical infrastructure.

The artificial-intelligence boom has driven up the cost of sales-tax exemptions, fueling concerns over power and water consumption. Over a decade ago, Ohio exempted tech companies from sales taxes on computer servers and other equipment needed for data centers, betting that the incentives would attract much-needed investment to the state. However, Amazon's nearly $40 billion investment in Ohio data centers since 2015 and Meta's more than $2.3 billion investment since 2018 have raised concerns about the fairness of these tax breaks.

Republican Governor Mike DeWine paused new applications for the exemption after public backlash in May. Democratic Representative Tristan Rader is now proposing new data-center taxes and requirements that developers pay more for power and electrical infrastructure, saying 'They seem to have more money than God, and they're able to build without the need for these types of incentives.'