Ohio halts costly AI data center tax breaks amid rising backlash
Ohio has suspended a major tax break designed to attract AI data centres. The decision comes as opposition to these facilities grows across the state. Governor Mike DeWine’s office pointed to the surging cost of the exemption as a key factor behind the pause. The tax exemption, which covers construction materials and high-value equipment for data centres, was originally expected to cost $136 million in fiscal 2025 and $142 million in 2026. Instead, it ballooned to $554 million in 2024 and is projected to reach nearly $1.6 billion in 2025. DeWine’s administration cited these figures, along with legislative research, as reasons for halting the incentive.
Meanwhile, a citizen-led campaign is pushing for a referendum to permanently ban hyperscale data centres. Organisers must gather enough signatures by 1 July to place the measure on the midterm election ballot. The future of the tax break itself remains uncertain, as its resumption may hinge on the next governor after DeWine’s term limit expires.
Criticism of data centre tax incentives is spreading beyond Ohio. Governors and lawmakers in other states are increasingly questioning similar breaks, reflecting broader concerns about their financial and community impacts. The pause in Ohio’s tax exemption marks a shift in policy as costs rise and public resistance strengthens. Whether the break returns could depend on the outcome of the upcoming election and the stance of the next administration. For now, the state’s approach to data centre incentives remains in limbo.
