NC’s data center tax breaks could reach billions, Stein says. He wants lawmakers to cut them

North Carolina Governor Josh Stein announced a proposal to significantly reduce or eliminate special tax exemptions for data centers, warning that the state could otherwise forfeit billions in revenue. Speaking to his new Energy Policy Task Force in Raleigh, Governor Stein argued that while AI innovation is crucial, North Carolina taxpayers should not be subsidizing large tech companies like Amazon, Google, Microsoft, Meta, and NVIDIA, which he says are driving up energy costs for residents. The governor highlighted that a 300-megawatt data center can consume as much electricity as approximately 200,000 North Carolina homes. He questioned the logic of subsidizing data centers that contribute to increased power bills, noting broad public opposition to such facilities, with only 24% of North Carolinians approving of one in their community, according to an Elon University poll. The tax breaks, initially created 20 years ago, are estimated to cost the state $50 million annually, a figure that could escalate to $2.3 billion in one-time exemptions and an additional $450 million annually if all proposed data centers are built. Microsoft, specifically mentioned for its data center plans in Person County, has faced skepticism from clean-water advocates, though the company has pledged to minimize water use. Republican lawmakers, including Rep. Kyle Hall, chairman of the House Energy Committee, expressed uncertainty about the proposal's reception, while Sen. Julie Mayfield, a Democrat, supported considering it given past legislative actions on tax incentives. Governor Stein believes that with trillions of dollars flowing into data center construction, the market already provides sufficient incentives, rendering state tax breaks unnecessary.