Kentucky Data Center Tax Breaks Could Cost State More Than $1 Billion
A Kentucky Center for Economic Policy analysis says statewide data center tax incentives could cost the state more than $1 billion in lost sales tax revenue. In Owen County, community advocate Mike Haines said residents want a moratorium on data center construction because the county lacks zoning regulations and permits.
A Kentucky Center for Economic Policy analysis estimates that tax incentives for data centers could reduce state sales tax revenue by more than $1 billion, far above the previous estimate of $15 million annually. The Kentucky General Assembly created a data center sales tax exemption for Jefferson County in 2024 and expanded it statewide the following year, although no data center has yet received an incentive from the Kentucky Cabinet for Economic Development.
Mike Haines, an Owen County resident and community advocate, said residents are concerned that developers could claim tax breaks, begin construction and later abandon projects. He called for a county moratorium on data center construction, citing Owen County's lack of zoning rules and limited public resources. Some Kentucky lawmakers are also considering further expansion of data center incentives.