Data center tax break could mean $2 billion in uncollected revenue for Wisconsin

Wisconsin is estimated to forgo $2 billion in sales tax revenue due to a tax exemption for data centers, a measure included in the 2023-25 state budget. The tax break, passed by the Republican-controlled legislature and signed by Gov. Tony Evers, exempts companies like Meta and Microsoft from paying the state's 5% sales tax on data center construction purchases. Jason Stein, president of the nonpartisan Wisconsin Policy Forum, indicated that the full extent of data center development might not have been understood when the break was passed. The Legislative Fiscal Bureau, as reported by Wisconsin Watch, estimates $1.5 billion in lost revenue during construction and an additional $369 million annually. This $2 billion figure encompasses projects by Microsoft in Mount Pleasant, Meta in Beaver Dam, Oracle in Port Washington, and Epic in Verona. While the tax break aims to attract tech investment, critics, including Democratic state Sen. Jodi Habush Sinykin, D-Whitefish Bay, are concerned about the potential strain on the state's energy and water supplies. Senator Sinykin, who requested the fiscal numbers, emphasized the need to understand the return on the state's investment. Conversely, Tricia Braun, executive director of the Wisconsin Data Center Coalition, asserted that data centers present a significant opportunity for Wisconsin and that the state is capable of handling complex projects.