DeWine halts new sales-tax breaks for data centers

Ohio Governor Mike DeWine has announced a halt to new sales-tax breaks for data centers, instructing the Ohio Tax Credit Authority to defer consideration of fresh incentive applications. This move is a direct response to increasing scrutiny over the data center industry's rapid expansion in the state and concerns about the significant amount of tax revenue foregone due to existing exemptions.

Reports from News 5 and Signal Ohio revealed that the state forfeited nearly $1.57 billion in sales-tax exemptions last year, far exceeding initial predictions, with local sales-tax breaks totaling an additional $446.3 million.

Governor DeWine acknowledged data centers as a vital component of the technology-driven economy, contributing to Ohio's attractiveness for other businesses and jobs, and noted that companies receiving breaks invested $27.2 billion last year. However, he emphasized the importance of the ongoing study by a joint legislative committee in Columbus into the potential benefits and drawbacks of data centers. While existing tax breaks for companies like Amazon, Google, Microsoft, and Meta remain unaffected, and one pending request will still be considered, no new applications will be processed during this review period.

This action follows a previous attempt by the General Assembly last summer to eliminate the data center exemption, which Governor DeWine vetoed, citing the economic benefits. His current decision underscores a commitment to a thorough review of the industry's statewide impact.