Ohio’s major sales tax break for data centers survived the latest biennial state budget, and now, stakeholders are urging lawmakers to leave it alone.
Legislators and lobbyists from across the aisle have said for years they want to rein in the incentives offered to the electric-intensive facilities that have taken over swaths of farmland over the last decade. Among many measures in House Bill 96, the legislature eliminated an exemption from sales taxes on materials contractors use to construct them.
Gov. Mike DeWine vetoed that, but House Speaker Matt Huffman (R-Lima) told reporters last week they were counting override votes.
In a letter addressed to Huffman, cosigners including Google, Microsoft, Amazon Web Services and Meta urged him to refrain from bringing the override before the House.
“The legislature’s proposed elimination of the industry’s sales tax exemption would have created tremendous uncertainty for many existing and potential data center projects across the state,” the Monday letter reads. “Using a veto override to abruptly cut off the program for new agreements could significantly impair the ability to finance, construct and secure tenants for both single-user and critical multi-tenant data centers.”
Other cosigners included the Ohio Chamber of Commerce and Business Roundtable as well as the Ohio State Building and Construction Trade Council and the regional International Brotherhood of Electrical Workers.
A study by the Chamber’s Research Foundation concluded the industry contributed more than $1 billion in state and local tax revenue in 2024, though only $260 million of that was a direct contribution.
Some lawmakers have questioned how much Ohio’s tax break has to do with that.
“There’s some states that are getting more revenue with far less data centers,” Sen. Kent Smith (D-Euclid) told reporters in February. “This tax break, maybe this was a good idea six years ago, eight years ago.”
A veto override vote could be scheduled for as soon as Wednesday.
