Ohio Senator Moreno Targets Data Center Tax Breaks With 100% Federal Clawback
Ohio Senator Bernie Moreno is proposing federal legislation to claw back 100% of state and local tax incentives given to data centers in Ohio, citing concerns over economic benefits and taxpayer costs. This initiative follows Ohio Governor Mike DeWine's pause on new data center tax agreements due to soaring exemption costs and strain on the electric grid. The article highlights specific beneficiaries like Ark Data Centers and Cologix Inc., as well as legacy agreements with Amazon, Meta, and Google.
U.S. Senator Bernie Moreno (R-Ohio) is proposing federal legislation to impose a 100% federal tax clawback on any state or local tax incentives granted to data centers. This plan aims to neutralize the financial benefits of these tax breaks, which Moreno argues are "sweetheart deals for Wall Street" rather than genuine economic development. The proposal comes as Ohio grapples with the escalating costs of such exemptions, which totaled $1.57 billion in state sales tax revenue in 2025 alone, far exceeding initial forecasts, and an additional $166.8 million in local sales tax losses for 2024.
Moreno's frustration stems partly from deals like the $4.5 million state sales tax break for Ark Data Centers' $136 million expansion in Akron and Independence, which was expected to create only 10 jobs. The issue is further complicated by existing long-term agreements, such as those signed by former Governor John Kasich's administration with tech giants Amazon, Meta, and Google, granting them 100% sales tax exemptions for up to 40 years on investments reaching $8 billion. These legacy contracts are largely immutable at the state level, prompting federal intervention.
The proposed federal action also aligns with efforts by U.S. Senator Ron Wyden (D-Oregon), who has suggested eliminating federal tax write-offs for data center construction and implementing a federal gross receipts excise tax on data center operations. These federal initiatives underscore a growing nationwide concern over the economic and environmental impact of data centers.
In Ohio, the data center boom has significantly strained the electric grid; AEP Ohio reported contracted data center power capacity in 2026 reached 17,861 megawatts, vastly exceeding the utility's historical peak demand. Governor Mike DeWine has already responded to these concerns by enacting a pause on new data center tax agreements until he leaves office, though a $42.3 million exemption for Cologix Inc.'s $1.17 billion project in Delaware and Licking counties was approved hours before the moratorium took effect due to a grandfathering provision.