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Wisconsin is projected to forgo over $2 billion in state and local sales tax revenue due to an exemption granted to data centers in the 2023-25 state budget. This estimate, from the nonpartisan Legislative Fiscal Bureau, includes $1.5 billion during the construction phase and an additional $369 million annually once facilities are operational. The tax break was initially enacted by the Republican-controlled Legislature and Democratic Gov. Tony Evers to attract economic development, with major projects by companies such as Microsoft and Meta in Beaver Dam, Mount Pleasant, and Port Washington benefiting. A smaller Epic project in Verona is also included in the estimate. Economists like Ross Milton of the University of Wisconsin-Madison suggest this forgone revenue might not have been captured otherwise, as the exemption helps Wisconsin compete with 38 other states offering similar data center tax breaks. Tricia Braun, executive director of the Wisconsin Data Center Coalition, emphasizes that the projection does not account for the broader economic benefits from data center suppliers and related spending. Jason Stein of the Wisconsin Policy Forum also believes the state could recover revenue through various taxes from construction workers, employees, and utility taxes. The significant financial impact has ignited new calls for data center regulation and policy discussions. State Sen. Jodi Habush Sinykin (D-Whitefish Bay) requested the estimate and advocates for tying the exemption to environmental protection requirements. She is pushing for an extraordinary legislative session to address a variety of data center bills. This shift reflects a national trend where state legislation is increasingly focusing on regulation of energy, environment, and transparency, moving away from solely offering incentives. Shawn Haney, a data center opponent, supports modifying the exemption to allow the state to collect some sales tax revenue, citing the unforeseen scale of current data center developments.