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Data-center tax breaks: what each state gives up
Official figures only, framed as their sources frame them · as of 2026-08-12
- 32 states offer tax incentives to data centers, and 12 of them fail to disclose even aggregate revenue losses, according to Good Jobs First's report 'Cloudy with a Loss of Spending Control' (published April 2025, updated April 2026). Source: Good Jobs First
- This page documents 14 states' incentives with an official or verified cost figure, stated exactly as the source frames it (forgone revenue vs reported benefit vs projection - they are not comparable numbers).
Most states exempt data-center equipment from sales tax to attract projects; what that costs is published unevenly - some states audit it, some only estimate it, most don't say. This table carries only verified figures, framed as their source frames them. It is separate from electric bills (taxes fund states, rates fund utilities) but it is the same question: who pays for data centers.
| State | Incentive | Cost (as stated by source) | Status | Notes / source |
|---|---|---|---|---|
| AZ | transaction privilege (sales) tax exemption for computer data centers | $19 million (reported cost, 2024) | suspended (moratorium on new applications July 1, 2026 – June 30, 2029) | Budget bills HB 4168/SB 1861 bar the Arizona Commerce Authority from accepting new exemption applications for three years. Good Jobs First |
| GA | sales and use tax exemption for high-technology data center equipment | $474.2 million (forgone state revenue, FY2025) | active | A 2026 Senate-passed repeal bill (SB 410) died in the House; Gov. Kemp vetoed a 2024 suspension bill. Georgia Department of Audits and Accounts |
| IA | sales and property tax exemptions for data centers | $151.1 million (sales and property tax exemptions, 2020) | active | 2020 is the most recent year Iowa has disclosed; localities forwent $23 million in property taxes that year. Good Jobs First |
| IL | sales and use tax exemptions under the Data Center Investment Program | $370.6 million (state and local exemptions reported by companies, 2023) | suspended (new incentives paused July 1, 2026) | Good Jobs First reports the 2023 cost was up 628% from 2022; Gov. Pritzker paused the program's incentives effective July 1, 2026. Good Jobs First |
| MI | sales and use tax exemptions for qualified and enterprise data centers (SB 237/HB 4906, enacted Dec 2024) | $2.5 million per year (existing qualified-data-center exemptions, Senate Fiscal Agency estimate) | active (expanded Dec 2024) | SB 237 extended the qualified-data-center exemptions to 2046 and created a new enterprise data center exemption. Michigan Senate Fiscal Agency |
| MN | sales and use tax exemptions for qualified data centers | $114.2 million (sales and use tax exemptions, 2025) | active (electricity exemption ended July 1, 2025) | Electricity purchases no longer qualify as of July 1, 2025; equipment/software refunds remain per the Minnesota Department of Revenue. Good Jobs First |
| NC | sales and use tax exemption on data-center electricity (repealed 2026); equipment exemptions retained | $21.4 million (projected General Fund revenue gain from repeal, FY2026-27) | repealed (electricity exemption; equipment exemption remains) | The projected gain rises to $28.6 million annually by FY2030-31; North Carolina does not disclose the cost of its remaining equipment exemption. Data Center Knowledge (NC Fiscal Research Division projection) |
| NV | sales and property tax abatements for data centers | $140.0 million (sales and property tax exemptions, 2024) | active | Good Jobs First |
| OH | sales and use tax exemption for qualifying data centers | $1.568 billion state sales tax (Ohio Dept. of Taxation actual, 2025) | active; repeal vetoed, new approvals paused | In 2024 it cost $554.9 million in state sales tax plus $166.8 million in local sales taxes, versus an original $136 million estimate; lawmakers' repeal was vetoed by Gov. DeWine and an override stalled. Signal Ohio (Ohio Department of Taxation data) |
| PA | sales and use tax exemption for data center equipment | $188 million (projected forgone revenue, FY2026-27) | active | Projected to total roughly $2 billion cumulatively by mid-2031. Spotlight PA |
| TN | sales and use tax exemptions for qualified data centers | $103.6 million (state and local sales tax exemptions, 2025) | active | Good Jobs First reports Tennessee localities lost $27 million of this. Good Jobs First |
| TX | sales and use tax exemption for qualifying data centers (Tax Code Secs. 151.359 and 151.3595) | $1,015.6 million (Comptroller-estimated exemption value, FY2025) | active | The Comptroller's January 2025 report projects the value rising to $1,753.3 million by FY2030; Gov. Abbott has pledged to seek repeal in the 2027 session. Texas Comptroller of Public Accounts, Tax Exemptions and Tax Incidence (Jan 2025) |
| VA | retail sales and use tax exemption | $1.9 billion (reported tax benefit, FY2025) | active | The 2026 General Assembly debated changes: the Senate proposed an impact fee, the House an accountability study. Virginia Department of Taxation |
| WA | sales and use tax exemptions for data centers (urban and rural programs) | $112.1 million (state and local sales tax exemptions, two programs, 2025) | active (narrowed July 1, 2026) | ESSB 6231 ended refurbishment eligibility and replacement-server purchases effective July 1, 2026; JLARC found the urban-counties program alone saved beneficiaries an estimated $13.4 million in FY2025. Good Jobs First |
Repealed, suspended or contested
- AZ: Arizona enacted a three-year moratorium on its data-center sales tax exemption via budget bills HB 4168/SB 1861, barring the Arizona Commerce Authority from accepting new applications from July 1, 2026 until June 30, 2029. MultiState
- IL: Governor Pritzker directed the Illinois Department of Commerce and Economic Opportunity to pause tax incentives for data centers beginning July 1, 2026. MultiState
- NC: North Carolina repealed the sales and use tax exemption on electricity purchases by qualifying data centers in the 2026 state budget signed by Gov. Josh Stein, while keeping exemptions for qualifying equipment and capital investment. Data Center Knowledge
- WA: Washington's ESSB 6231 (signed April 1, 2026) narrowed the urban and rural data-center exemptions effective July 1, 2026: refurbishment projects no longer qualify, previously granted refurbishment certificates expire, and replacement server purchases are no longer eligible; JLARC recommends letting the urban exemption expire. Washington JLARC 2026 tax preference review
- MN: Minnesota ended the sales tax exemption on electricity for qualified data centers - starting July 1, 2025, purchases of electricity do not qualify - while exemptions on enterprise IT equipment and software remain refundable for up to 20 years per facility or through June 30, 2042. Minnesota Department of Revenue
- OH: In June 2026 Gov. DeWine directed the Ohio Tax Credit Authority to stop considering new data-center tax exemption applications while the legislature studies the industry's impacts; a full legislative repeal passed in the budget had been vetoed by DeWine. MultiState
- NY: On July 14, 2026, Governor Hochul launched the first statewide moratorium on new hyperscale data centers and said she would pursue repeal of New York's data-center sales tax exemptions. Office of Governor Kathy Hochul