Ohio Sen. Bernie Moreno Calls for End to Data Center Tax Subsidies
Ohio U.S. Senator Bernie Moreno announced plans to introduce federal legislation to eliminate the benefit of state and local tax incentives for data centers by imposing a 100% federal tax on them. This proposal is aimed at addressing concerns over electricity demand, water use, environmental impacts, and taxpayer costs. Ohio has previously provided billions in tax exemptions to major tech companies, sparking debate about the sustainability of such incentives.
U.S. Senator Bernie Moreno (R-OH) announced his intention to introduce federal legislation aimed at nullifying the financial advantages of state and local tax incentives for data centers. Speaking at an energy affordability summit in Columbus, Ohio, Moreno proposed a federal tax equal to 100% of any incentive provided, effectively canceling out their value to recipient companies. His stance is that taxpayer funds should not support data center projects.
Moreno's proposal comes amid increasing debate in Ohio and other states regarding data center development. Critics, including Moreno, cite concerns about the facilities' substantial electricity and water demands, environmental impact, and the cost of infrastructure borne by taxpayers. Ohio has committed at least $2.3 billion in sales-tax exemptions for data centers, with Google, Meta, and Amazon having agreements valued at around $600 million each over 40 years. Governor Mike DeWine previously paused new data center incentives due to higher-than-projected costs.
Moreno emphasized his belief that the public has not received a compelling justification for using taxpayer dollars to support these facilities, which he claims will consume local resources and potentially increase electricity prices. He previously criticized a $4.5 million Ohio tax incentive for a Carlyle Group-backed data center expansion, noting its minimal job creation versus potential grid strain.
Adding to the legislative efforts, U.S. Senator Jon Husted (R-OH) introduced the Ratepayer Protection Act in July, which would mandate states to consider standards for connecting large electricity users, including data centers, to the grid. While Husted's office did not confirm support for Moreno's specific tax proposal, both senators are focused on mitigating the financial burden of data center expansion on Ohio households and small businesses.