TN Rep. Behn proposes 3-year pause on data center tax exemptions
Tennessee State Rep. Aftyn Behn is proposing a three-year pause on new data center tax exemption certificates to better track their financial impact. She plans to file the bill for the 2027 legislative session, highlighting that state departments currently cannot quantify the revenue lost from these exemptions. Behn is also hosting a community event in Nashville to discuss the impact of data centers.
Tennessee State Rep. Aftyn Behn (D-Nashville) plans to file a bill for the 2027 legislative session that proposes a three-year pause on new data center tax exemption certificates. The legislation aims to improve how the state tracks the financial impact of these exemptions by requiring the Tennessee Department of Revenue to report the total cost annually, identify recipients, and provide compliance information.
Under current Tennessee law (Tenn. Code Ann. § 67-6-206), qualified data centers can receive sales tax exemptions on specific computer equipment, repair services, and backup power infrastructure, as well as a reduced 1.5% tax rate on electricity after investing at least $100 million and creating 15 full-time jobs. Behn's office confirmed with the Department of Revenue and the Tennessee Department of Economic and Community Development that 25 active data center exemption certificates exist statewide, but neither department tracks the revenue lost from these exemptions.
Rep. Behn criticized the state's inability to quantify the cost, stating, “It’s time Tennessee started caring about Tennesseans as much as it cares about data centers.” She argues that multi-million-dollar corporations receive exemptions the state cannot quantify, while working people struggle financially.
Behn is also inviting the public to a free community event in Nashville on Thursday, September 10, from 6 to 8:00pm at the Scarritt Bennett Center’s Harambee Auditorium to discuss the broader impact of data centers.