Ohio proposes permanent end to data center sales tax exemptions

The proposed tax repeal signals a shift from unquestioned growth to fiscal accountability as data centers' utility and revenue impacts scale. For hyperscalers like Amazon and Google, the loss of these exemptions significantly increases the capital expenditure required for regional clusters. This move reflects a broader national trend where states are re-evaluating the trade-off between tech investment and the strain on public resources. Strategists should watch for a potential migration of new projects toward states like Texas or Wyoming that maintain aggressive incentive structures. The final legislative hearing schedule for H.B. 975 and S.B. 374 remains the primary indicator of whether this permanent repeal will succeed where previous budget vetoes failed.

The legislative push in Ohio coincides with unprecedented capital expenditure from hyperscalers. Per Bloomberg and CRN (January 2025), Amazon Web Services alone planned to invest $10 billion in Ohio infrastructure through 2030, while Meta has been deploying rapid-construction 'tent-style' data centers in New Albany to accelerate AI chip integration. However, the physical scale of these projects is clashing with infrastructure limits. Per Data Center Knowledge (June 2026), American Electric Power (AEP) Ohio recently proposed requiring new data centers to commit to paying for 90% of their requested power capacity for a decade to protect other ratepayers from infrastructure costs.

Ohio’s fiscal friction mirrors developments in other major tech hubs. Per Capitol News Illinois (June 2026), Governor J.B. Pritzker recently suspended new data center tax agreements starting July 1, after that state’s program reached nearly $1 billion in total tax benefits. Similarly, Pennsylvania’s Governor Josh Shapiro introduced the 'GRID' standards in June 2026, which would tie future tax exemptions to strict clean energy use and minimum job creation targets. These multi-state actions suggest that the era of open-ended subsidies for server farms is ending as the AI boom drives power demand to levels that threaten local grid stability and taxpayer budgets.