Republican lawmakers in Ohio have backed off their efforts to reduce or eliminate a sales tax break for the technology behemoths behind the data center boom here, which cost the state $2 billion in 2025 alone in lost state and local sales tax revenue.
Revelations about the $2 billion figure – lawmakers say they had no clue how big the tax credit had gotten in the last few years – have stirred the General Assembly into overdrive over the past few weeks. A joint committee formed to study the issue has met for more than 18 hours since May 27, fielding testimony from state, local, industry and union officials, plus the public.
But as the clock neared 10 p.m. Wednesday in the last scheduled session before the November elections, the General Assembly abruptly pulled a vote on the committee’s much-hyped data center legislative package.
The legislation would have reduced the size of any new tax breaks to data centers, although it wouldn’t impact any existing tax exemptions or abatements. Its implosion indicates either a political inability or unwillingness to cut into a lucrative tax break for players behind the meteoric artificial intelligence sector.
This all amounts to a major win for the tech developers, which state officials entirely exempted from nearly $1.6 billion in 2025 from Ohio’s statewide 5.75% sales tax, plus another $446 million from local sales taxes, according to the state Department of Taxation. The combined figure was about $722 million in 2024.
House Speaker Matt Huffman, a Lima Republican, told reporters late Wednesday that Senate leaders pulled the vote because House Republicans wanted to eliminate – and not reduce – the tax breaks for data centers.
“There’s some sore elbows here over, ‘Hey wait a minute, we keep finding out what a great deal these guys have. Why would we give them additional tax exemption?’” Huffman said, per the USA TODAY Network Ohio Bureau.
For some of the biggest names in the industry – Google, Meta and Amazon – those exemptions are worth $600 million in total by the time they mature over their 40-year lifespan, per newly released data from the state’s economic development office. All told, Ohio has agreed to at least $2.3 billion in state sales tax exemptions to 18 companies, but officials warn the real dollar number could be “significantly higher.”
And while statewide property tax abatement data is not available, most data centers strike long-term deals with local governments that drastically reduce their local property tax bills as well. For instance, in New Albany, the epicenter of the local data center economy, there are 17 data centers, all of whom have been granted property tax abatements of between 65% and 100% over 15-year periods.
Data centers grow increasingly unpopular
New awareness about the ballooning nature of the tax breaks has renewed political interest in killing them, given public opinion polling and overwhelmingly negative public hearings indicate data centers have grown increasingly unpopular with voters.
Republicans passed legislation last year that would have ended the state sales tax exemption. Gov. Mike DeWine vetoed the bill, emphasizing the tens of billions of dollars data centers have spent building facilities in Ohio and the importance of the credit in their siting decisions.
Last year, lawmakers – relying on estimates of the size of the tax breaks that turned out to be dramatic underestimations by a factor of more than 10 – voted to end the sales tax break entirely. Gov. DeWine vetoed the provision.
While Huffman has previously expressed interest in overriding the governor’s veto, on Tuesday he acknowledged he didn’t have the required 60 votes.
“I don’t think it’s practical and perhaps even possible at this point to get a veto override,” he said.
Rep. Gary Click, a Sandusky County Republican who identifies as a data center critic, characterized the legislation as a compromise between the industry, the absolutists seeking a moratorium, and the skeptical but persuadable Ohioans.
As for what happened with the tax credits, Click said in an interview Wednesday it’s all about basic political math.
“You have to get to 60 [votes to override a veto] and there doesn’t seem to be 60,” he said.
Leading up the vote, Democrats framed the bill as better than the status quo, but lamented the way it preserves hugely favorable tax deals for companies who bring in more revenue than most countries.
Sen. Kent Smith, a Euclid Democrat, said Wednesday that the blame rolls from Gov. John Kasich – whose administration inked the 40-year deals with Meta, Google and Amazon – through DeWine, who has protected the industry.
“Tonight Statehouse Republicans could have ended it but they chose not to do so,” he said. “This is the latest example of the GOP supermajority looking out for billion-dollar corporations and not everyday Ohioans.”
