- Ohio’s tax exemption for data centers has been temporarily suspended for new projects
- The plan was projected to cost $136 million in 2025, but cost nearly $1.6 billion.
- Hyperscalers invested more than $27 billion in the state in 2025 alone
Ohio Gov. Mike DeWine issued a temporary repeal of the state tax exemption for data centers while lawmakers review the program and its impact on state finances, energy infrastructure and local communities.
According to the Associated PressThe change only affects new applicants and will not apply to previously approved incentives.
The change comes as the number of data center projects in Ohio grows, and major hyperscalers like Amazon, Microsoft, Google and Meta call the state home for some of their cloud operations.
Ohio to temporarily suspend tax exemption for data centers
AP reports that the state had forecast a loss of $136 million in taxes in 2025 due to the plan, and $142 million in 2026, however, the actual numbers have been dramatically higher. In 2024, the state stopped paying $554 million in taxes, and in 2025 this figure approached $1.6 billion.
Some of the tax breaks the state offered, and has now suspended, include taxes on sales of servers, networking equipment, storage systems and other necessary infrastructure.
However, since data centers are notorious for their high resource consumption, local residents have raised concerns about electricity demand, water consumption, land use, and other pressures on local infrastructure. About 18 Ohio communities have already enacted or considered moratoriums or restrictions on data center development, according to The Ohio Newsroom.
“I believe it is appropriate for the Ohio Tax Credit Authority to pause its consideration of new tax breaks for data centers while the full impact of data center growth in Ohio is reviewed,” DeWine said.
Although Ohio has lost billions in taxes since the plan was introduced, the Governor recognized the positive impacts these projects have had on creating new jobs and attracting new businesses. Additionally, projects that benefited from state tax breaks reported a total capital investment of $27.2 billion in 2025 alone, representing significant spending in the state.
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