States Challenge Tax Breaks for Big Tech Data Centers

The AI boom is bringing a new challenge to tech giants like Amazon, Meta, and Google. States are revisiting tax incentives that made big data-center projects more affordable.

Ohio is an example of how quickly costs can escalate. Initially, the state thought its sales-tax exemption for data centers would cost less than $150 million. Last year, however, it was over $1.5 billion, more than ten times the original estimate.

Lawmakers are now debating whether businesses like Amazon should retain their long-term privileges. Amazon claims to have invested around $40 billion in Ohio data centers since 2015.