Daniel Moore (Bloomberg Law): Data Centers Won Billions in Tax Breaks. Some States Are Balking

Ohio and other states are weighing whether to roll back sales tax exemptions for data centers amid a boom in development and concerns about the resources required to power them.

The exemptions, which can last a decade or longer, mean state and local governments don’t see revenue from the purchase of construction materials or equipment, with Ohio expecting to forgo $142 million in tax revenue in the next fiscal year.

Lawmakers are considering measures to curtail the data center explosion, including imposing a moratorium on new data centers that don’t build their own power sources and assessing a user fee to give the state another revenue stream.

Leah McBride Mensching (Bloomberg Law): Arizona Governor Seeks to End Data Center Sales Tax Exemption

Arizona Gov. Katie Hobbs proposed ending a tax break for data centers and reiterated a plan to incorporate some parts of the 2025 federal tax law into the state tax code.

The tax break, approved in 2013, costs the state $38 million annually in lost revenue, Hobbs said in her speech.