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Ohio state lawmaker Tristan Rader is pushing to claw back sales-tax exemptions worth more than $1.5 billion. Those data center tax breaks let Amazon, Google and Meta avoid tax last year alone, a figure he says blew past original state estimates by more than tenfold. Rader, a Democrat representing Lakewood, wants new data-center-specific taxes. He also wants requirements that the companies pay more toward the power and electrical infrastructure their facilities consume.
How the data center tax breaks ballooned
Ohio’s sales-tax exemption for data centers was designed to attract investment. It lets operators avoid tax on qualifying equipment purchases in exchange for long-term commitments to build and hire in the state. Rader says the exemption’s actual cost to Ohio surged past $1.5 billion last year. That is more than ten times what state officials originally projected when the incentive was designed. The overshoot is large enough that it has drawn bipartisan attention to how the program is structured going forward.
Why one lawmaker is pushing back now
Rader’s objection is blunt: he argues Amazon, Google and Meta no longer need the incentive to justify building in Ohio. “They seem to have more money than God and they’re able to build without the need for these types of incentives,” he said. That framing casts the exemptions as an unnecessary subsidy to some of the world’s most profitable companies. It is not, he argues, a targeted tool for attracting investment that would not otherwise happen. His proposals include new data-center-specific taxes. He also wants operators to contribute more directly to the cost of power and electrical grid upgrades.
Ohio isn’t acting alone
The pushback fits a broader pattern of states rethinking how generously they court data centers. Ohio Governor Mike DeWine paused new applications for the sales-tax exemption in May 2026, effectively freezing the program while the state reassesses its cost. New York went further in July 2026, enacting a one-year statewide moratorium on new hyperscale data centers altogether. Both moves reflect growing concern among state officials. Hosting these facilities mainly brings construction jobs and a smaller number of permanent operations roles. Officials increasingly doubt that benefit still outweighs the tax revenue given up, and the strain the facilities place on local power grids.
What the companies have said
Amazon, Google’s parent Alphabet, and Meta did not immediately respond to requests for comment on Rader’s proposal. Their silence leaves the political framing largely to critics for now. All three companies have previously defended data-center investment in other states. They point to local job creation, community infrastructure spending, and long-term tax revenue once exemption periods expire.
What happens next for data center incentives nationally
Rader’s proposal would need to move through the Ohio legislature. Its prospects depend on how much appetite Republican leadership has for revisiting an incentive program tied to some of the state’s largest recent capital investments. More broadly, expect other state legislatures to watch Ohio and New York closely. Either state might successfully claw back incentives, or hold firm on a moratorium without scaring off future investment. If so, other states weighing similar hyperscale data-center proposals are likely to write tighter terms into their own incentive packages. Utility regulators are also part of this conversation. Much of the recent criticism centers as much on the strain hyperscale facilities place on regional power grids as on the tax revenue foregone. Several states are separately weighing whether data-center operators should pay a larger share of the transmission and generation capacity their facilities require.
Frequently asked questions
How large are the data center tax breaks in question?
Ohio’s sales-tax exemption for data centers cost the state more than $1.5 billion last year, according to state Rep. Tristan Rader, more than ten times the original estimate.
Which companies are named in the dispute?
Amazon, Google and Meta are the companies Rader specifically cited as beneficiaries of Ohio’s data center sales-tax exemption.
What is Rader proposing instead?
New data-center-specific taxes and requirements that operators pay more toward the cost of power and electrical infrastructure their facilities require.
Have other states taken similar action?
Yes. Ohio’s governor paused new exemption applications in May 2026, and New York enacted a one-year moratorium on new hyperscale data centers in July 2026.
Have Amazon, Google or Meta responded?
None of the three companies immediately responded to requests for comment on the proposal.
Why states offered these incentives in the first place
Sales-tax exemptions for data centers became a common economic-development tool over the past decade. States competed for the large capital investments hyperscale computing facilities represent, often running into the billions of dollars per site. The pitch to state legislatures was straightforward: exempt the equipment purchases from tax. In exchange, the state gains construction jobs, a smaller number of permanent operations positions, and property-tax revenue once any abatement period ends. What has changed is the sheer scale of recent AI-driven data center buildouts. That scale has made the true cost of these exemptions far larger than the modest programs originally designed for a handful of facilities per state.
More on the AI infrastructure buildout
For more on the infrastructure race behind this fight, see our reporting on Oracle’s delayed Project Jupiter data center and AMD’s climb to a trillion-dollar valuation.
Sources
- Benzinga — Amazon, Google and Meta Face Pushback Over Data Center Tax Breaks. https://www.benzinga.com/markets/tech/26/09/61677645/amazon-google-and-meta-face-pushback-over-data-center-tax-breaks-lawmaker-says-they-have-more-money-than-god
- PYMNTS — Amazon, Microsoft and Google Under Fire for Data Center Resource Use. https://www.pymnts.com/cpi-posts/amazon-microsoft-and-google-under-fire-for-data-center-resource-use/
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