How Wisconsin’s data center tax break came to be
Wisconsin approved a sales and use tax exemption for data center construction and the electricity consumed by certified facilities through the 2023 state budget. The provision is now facing bipartisan calls for repeal as officials cite potentially large revenue losses and growing public opposition, while Microsoft plans several data centers in Mount Pleasant.
Wisconsin lawmakers added a data center sales and use tax exemption to the 2023-25 state budget through a Joint Finance Committee amendment, despite an identical standalone bill lacking a Senate hearing or vote. The exemption applies to construction and electricity costs for facilities certified by the Wisconsin Economic Development Corp. Lobbying records show utilities, Microsoft and the Wisconsin Technology Council supported efforts to enact the provision.
A Wisconsin Legislative Fiscal Bureau estimate projects that four data centers costing $36.9 billion to build between 2024 and 2028 could reduce state sales tax collections by about $1.5 billion, including up to $369 million annually from tax-free electricity purchases. Republican gubernatorial candidate Tom Tiffany and Democratic candidate David Crowley have both called for repeal, while a Marquette University Law School poll found that 74% of respondents believe data centers' costs outweigh their economic benefits. Microsoft is planning several facilities in the Mount Pleasant area, with total investment estimated at $13.3 billion.