Ohio Gov pauses new data center tax exemptions

Ohio Governor Mike DeWine has ordered a temporary suspension of a major tax incentive for new data center projects, a move that pauses one of the state's primary tools for attracting the massive computing facilities that power artificial intelligence. The directive, issued Wednesday, halts consideration of new applications for sales and use tax exemptions while a legislative committee studies the industry's rapid growth and its fiscal impact.

The governor directed the chair of the Ohio Tax Credit Authority to pause new tax exemption requests. One pending request is scheduled for review on June 1, after which the suspension will formally begin. The order does not affect existing agreements. Governor DeWine stated that he supports data centers as a critical component of the modern economy but believes a pause is appropriate while the Ohio General Assembly's Joint Data Center Committee conducts its review.

The suspension follows revelations that the cost of the tax exemption program has far exceeded initial projections. While the state projected the exemption would cost approximately $136 million for fiscal year 2025, the actual cost for 2025 was nearly $1.6 billion. The previous...