Ohio lawmakers consider ending data center tax breaks amid growing scrutiny

Ohio lawmakers are considering new restrictions on tax breaks for data centers as legislators prepare to revisit broader regulations on the rapidly growing industry later this year.

State Rep. Tristan Rader, D-Lakewood, has introduced House Bill 957, which would prohibit Ohio from granting new sales and use tax exemptions to data centers.

The measure remains before the House Ways and Means Committee.

“These data centers have more money than God, they absolutely do not need incentives to be here,” Rader told NBC4. “We’ve created a regulatory regime and a tax incentive structure that allows these things to crop up everywhere with very little contributions to the communities that they want to target to exist in.”

Rader said the state lost at least $1.5 billion in 2025 through the sales tax exemption.

Property tax abatements are also drawing scrutiny.

State Rep. Daniel Troy, D-Willowick, has introduced House Bill 999, which would prohibit property tax exemptions for data centers.

Unlike state sales tax incentives, local governments approve many property tax abatements.

State Rep. David Thomas, R-Jefferson, said lawmakers are examining those abatements and suggested eliminating them could have a more immediate effect on existing data centers.

“We could say no new sales tax exemptions starting today, but the big companies will still actually get them for the next couple of decades,” Thomas told NBC4. “But no more property tax, that means even the big folks, they’re going to have to pay their property tax share which will then lower the bills for all the other property owners.”

Troy said requiring data centers to pay their full property taxes could also help reduce the burden on residential property owners.

“If these entities pay property taxes based on their full unabated value, this could go a long way to reducing the burden on our residential homeowners,” Troy told NBC4.

The proposals come as lawmakers continue working on a broader package of data center regulations.

House Bill 646, sponsored by state Reps. Gary Click, R-Vickery, and Kellie Deeter, R-Norwalk, passed the Ohio House 97-0 in March before the Senate made substantial changes.

The Senate Energy Committee reported a substitute version of the bill June 10, but the Senate recommitted it to the committee later that day.

The Senate version would limit certain sales and property tax incentives for data centers and impose new electricity requirements on some large facilities.

Thomas told NBC4 he expects lawmakers to consolidate several pending data center proposals, potentially into HB 646, when lawmakers return after the November election.

As Ohio.News previously reported, state officials approved approximately $42.3 million in sales tax exemptions for two Columbus-area data center projects in June shortly before the state paused consideration of additional exemptions.