Stein questions whether state’s data center incentives still make sense

Gov. Josh Stein (D-NC) recently expressed skepticism regarding North Carolina's longstanding sales tax exemptions for data centers, which he estimates could cost the state $450 million annually in lost revenue once all planned projects are completed. He questioned the logic of subsidizing energy consumption by these facilities, arguing it contributes to higher power bills for residents at a time when state revenue is critical. The rapid expansion of data centers, driven by artificial intelligence and cloud computing, has intensified concerns over electricity and water usage in local communities. While some developers, like Microsoft in Person and Catawba counties, have offered to self-fund infrastructure and replenish water supplies, other projects have faced significant local opposition. For example, a project by Engineered Land Solutions in Stokes County was approved despite resident pushback over environmental and health concerns. North Carolina currently hosts 108 data centers by 56 providers, attracted by its low power costs and strategic location. Governor Stein has tasked the North Carolina Energy Policy Task Force, established in 2025, with developing alternatives to the sales tax breaks. These incentives, which cover equipment, software, and electricity, require a minimum $75 million investment, county wage standards, and health insurance for full-time workers.