Data center tax breaks are on the chopping block in some states
After years of states pushing legislation to accelerate the development of data centers and the electric grid to support them, some legislators want to limit or repeal state and local incentives that paved their way.
President Donald Trump also has changed his tone. Last year he issued an executive order and other federal initiatives meant to support accelerated data center development. Then last month, he cited rising electricity bills in saying technology companies that build data centers must “pay their own way,” in a post on Truth Social.
As the momentum shifts, lawmakers in several states have introduced or passed legislation that aims to rein in data center development by repealing tax exemptions, adding conditions to certain incentives or placing moratoriums on data center projects. Virginia lawmakers, for example, are considering ending a data center tax break that costs the state about $1.6 billion a year.
“Who is actually benefiting from these massive data centers that, in many cases, are the size of one or two shopping malls combined?” asked Michigan Democratic state Rep. Erin Byrnes, who introduced a proposal to repeal the state’s data center tax exemptions. “They have a large footprint in terms of land and energy usage. And by and large, it’s not going to be the average resident who lives near a data center who’s going to benefit.”
https://washingtonstatestandard.com/2026/02/25/repub/data-center-tax-breaks-are-on-the-chopping-block-in-some-states/