After Monday, Ohio will not give any new data centers the major tax break it has on its books, at least for now.
The 100% exemption from sales taxes on the materials contractors use to construct data centers has existed in the Ohio Revised Code for years. It’s drawn recent scrutiny over what it’s costing the state.
Newly released data, according to Signal Ohio, showed Ohio underestimated the 2025 cost of the tax break by more than $1.4 billion.
Gov. Mike DeWine has rebuffed legislative efforts to end the tax break. But on Wednesday, DeWine ordered the Ohio Tax Credit Authority to freeze new requests as the recently formed Joint Data Center Committee studies the electric intensive facilities, according to his office.
“I fully support the Ohio General Assembly’s work to study the issue and bring forward facts about data centers, including the local benefits to communities,” a statement from DeWine read. “As this work is ongoing, I believe it is appropriate for the Ohio Tax Credit Authority to pause its consideration of new data center tax exemptions.”
On social media, Rep. David Thomas (R-Jefferson) said the legislature needed to end the tax break for good. Rep. Mike Dovilla (R-Berea) said the move was “too little, too late.”
But the Chamber of Commerce, which has argued the industry’s economic benefits outweigh the energy demands and environmental costs, said Ohio “cannot afford to forfeit the transformational economic gains this industry yields.”
“Ohio is facing a huge opportunity to lead, and making ourselves less business friendly is not the way to maximize it,” a Wednesday statement from Chamber President Steve Stivers read.
The Ohio Tax Credit Authority will consider one existing request Monday.
