Gov. Mike DeWine is halting new sales-tax breaks for data centers, telling the Ohio Tax Credit Authority to hold off on considering new incentive requests while state lawmakers study the industry’s explosive growth.
The move follows separate reporting by News 5 and Signal Ohio showing the state is giving up much more tax revenue than officials originally predicted.
Numbers from the Ohio Department of Taxation show the state provided almost $1.57 billion in sales-tax exemptions on purchases of data center equipment and construction materials last year.
That’s nearly 12 times what state officials initially expected, according to estimates produced by the tax department in late 2024 as part of Ohio’s budgeting process.
Those numbers don’t include the value of local sales-tax breaks for data center projects, which totaled $446.3 million last year, according to tax department calculations.
In a statement Wednesday afternoon, DeWine called data centers “a critical component to today's technology-driven economy, which depends on the virtual, large-scale exchange of information.” He said robust technology infrastructure helps Ohio attract other businesses and jobs.
The governor also noted that data center companies receiving sales-tax breaks reported capital investments of $27.2 billion last year.
As the governor takes action, a joint legislative committee in Columbus is digging into the potential benefits and harms associated with data centers. That committee held its first hearing on Wednesday.
"I fully support the Ohio General Assembly's work to study the issue and bring forward facts about data centers, including the local benefits to communities when tax exemptions are granted,” DeWine said in his written statement. “As this work is ongoing, I believe it is appropriate for the Ohio Tax Credit Authority to pause its consideration of new data center tax exemptions while the full impact of data center growth in Ohio is being reviewed.”
The governor’s decision doesn’t impact existing sales-tax exemptions for tech firms, including Amazon, Google, Microsoft and Meta, the parent company of Facebook and Instagram. And the Ohio Tax Credit Authority will still consider a pending request for a sales-tax break at its June 1 meeting.
But companies will not be able to request and receive new sales-tax breaks.
The General Assembly tried to scrap the data center exemption last summer, as part of a budget bill. But the governor vetoed that move, citing the need for high-tech jobs in Ohio and billions of dollars in construction work created by data center projects across the state.
