More than a dozen U.S. states halt AI data center tax breaks: Ohio loses $1.6 billion in revenue a year

动察 Beating AI Flash: More than a dozen U.S. states are suspending, cutting, or re-reviewing tax incentives for data centers. Over a decade ago, states lured tech giants like Amazon, Meta, and Google to build data centers with tax exemptions. As the AI construction boom took off, the scale of incentives ballooned rapidly, and some states found actual costs far exceeding initial estimates.

Ohio is the most extreme case. The state's data center sales tax exemption is projected to cost the state government approximately $1.6 billion in lost revenue in 2025, roughly 11 times the original estimate of $136 million. Governor Mike DeWine has paused approval of new data center tax exemption applications. However, some incentives previously secured by Amazon, Meta, Google, and others could last for decades, and state lawmakers are pushing for renegotiation or new taxes.

New Jersey has also scrapped $250 million in unissued AI and data center tax credits from its original plan. Virginia, meanwhile, is retaining its equipment sales tax exemption but will impose an additional electricity excise tax of $0.011 per kilowatt-hour on certain data centers starting this July.