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Ohio's Data Center Tax Pause Exposes AI Infrastructure's Mounting Fiscal and Local Toll

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Ohio has hit the brakes on one of its most generous incentives for the facilities that train and run artificial intelligence systems. Gov. Mike DeWine directed the Ohio Tax Credit Authority to stop accepting new applications for sales tax exemptions on data centers after its June 1 meeting. The pause is temporary. It buys time for a newly formed legislative committee to examine the explosive growth of these power-hungry sites. But the decision lands amid sharp sticker shock. State officials once projected the exemption would cost $136 million in fiscal 2025. Actual figures reached $554 million in 2024 and nearly $1.6 billion in 2025. That billion-dollar forecasting miss has lawmakers from both parties demanding accountability. Cleveland.com detailed the gap and the resulting frustration on Capitol Square. DeWine himself supports the industry. In his announcement he called data centers “a critical component” of the economy and pointed to $37 billion in related investment over 2024 and 2025.…

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