Ohio Governor Mike DeWine has announced a pause on new sales tax exemptions for large-scale data center projects, following concerns that existing tax breaks have significantly reduced state revenue. The decision comes after legislative leaders reported that these incentives cost Ohio more than $1 billion in revenue over the past year.

Legislative Reaction

The pause applies to new exemptions moving forward, while existing agreements will remain in place. Members of the Ohio Legislature’s Joint Data Center Committee expressed surprise at the revenue loss, prompting renewed scrutiny of the state’s incentive structure. State Representative Adam Holmes, co-chair of the committee, described the governor’s move as ‘thoughtful,’ noting that lawmakers are reassessing the accuracy of earlier assumptions about the program.

Senator Brian Chavez mentioned that the pause could allow lawmakers to avoid an immediate vote on whether to override a previous veto related to repealing the exemptions. Meanwhile, Austin Baurichter, spokesperson for Conserve Ohio, criticized the state’s oversight, arguing that government officials should have a clearer understanding of the tax revenue impact of incentive programs.

Concerns Over Transparency

Opponents of the tax breaks have also raised concerns about the environmental impacts and the use of nondisclosure agreements between data center operators and local governments, which they argue limit public transparency. Democratic Representative Chris Glassburn questioned whether state agencies have provided enough information to fully evaluate the impact of the pause. He also expressed concerns about the lack of public access to details about long-term agreements between data center companies and local governments.

The Joint Data Center Committee will continue reviewing incentive policies and hearing testimony from stakeholders. Prior to the pause announcement, Governor DeWine approved a separate 10-year, 50% sales tax exemption for a Cologix data center project spanning Delaware and Licking counties, noting that the application was submitted before the new pause was enacted.

Future Implications

The committee is expected to continue evaluating Ohio’s data center tax incentive structure in upcoming hearings, while state officials assess the financial and policy implications of the governor’s pause on future exemptions. The outcome of these evaluations could significantly impact the future of data center developments in Ohio and the state’s approach to economic incentives.

Original reporting: WOWO News/Talk (Fort Wayne) — read the source article.