DeWine Announces Tax Exemption Pause on Data Centers

As lawmakers study the impact of data centers in Ohio, Republican Gov. Mike DeWine on Wednesday announced a pause in consideration of new tax exemptions for data centers.

Despite the directive, DeWine’s statement praised data centers, including how they have contributed to Ohio’s success.

“Data centers are a critical component to today’s technology-driven economy, which depends on the virtual, large-scale exchange of information. One of the reasons Ohio has been so successful in attracting new businesses and creating new jobs is that we have invested in the data infrastructure needed to support complex technological innovation,” the governor said.

Data centers, which have long enjoyed sales and use tax benefits in Ohio, reported a total capital investment of $27.2 billion in 2025, according to DeWine.

He also referenced new efforts from the Ohio General Assembly to study data centers, their benefits, and their use of resources.

“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 when tax exemptions are granted. 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 while the full impact of data center growth in Ohio is being reviewed,” the governor also said in a statement.

TRENDING ARTICLES

opinion

Senate GOP Leaders Pull a Bait-and-Switch With Reconciliation 3.0

Deroy Murdock

opinion

What Democrats Could Say, but Aren’t. What They Are Saying, but Shouldn’t.

Victor Davis Hanson

opinion

Victor Davis Hanson: Saluting Tulsi, Slamming Schiff

Victor Davis Hanson

The Ohio Tax Credit Authority will hold a meeting on Monday to consider an existing data center tax exemption request.

The Daily Signal spoke to one of the Ohio Joint Data Center Committee’s co-chairs, state Rep. Adam Holmes, about what drove DeWine’s decision.

“[It] was coordinated with the announcement of how much tax benefit there actually was through the Department of Development,” Holmes said. “[It] does give us some time to be more thoughtful and pragmatic about our deliberation in the committee.”

Holmes made clear that the committee welcomes the pause, saying, “Now’s the time to be really thoughtful about going forward.”

Signal Ohio reported that the sales tax exemption for data centers cost about $555 million in revenue for 2024, four times more than the amount forecast by the Ohio Department of Taxation. For 2025, that exemption cost $1.6 billion in revenue, 11 times more than the expected amount.

Because states must monitor energy and water usage for all residents, many policy leaders want data centers, which consume significant resources, to pay for themselves.

Dan Diorio, vice president of policy for the Data Center Coalition, told lawmakers this week that “data centers are fully committed to paying our whole cost.” Patrick Hedger, director of policy at NetChoice, told the Daily Signal that “data centers are paying their way.”

With 200 data centers already, and 77 new ones planned for 2030, Ohio ranks sixth in the nation on data centers, behind top states like Virginia and Texas. Supporters of the industry say removing tax incentives and other state support could slow data center growth.

Next week, the Ohio Joint Data Center Committee will hear testimony from those in the public who have concerns about data centers. Data center operators will also give testimony at subsequent meetings.