COLUMBUS, Ohio — A newly introduced bill in the Ohio Senate would prohibit the state from granting new sales tax exemptions to data centers, potentially reshaping how large-scale technology projects are incentivized in Ohio.
Senate Bill 374 proposes changes to existing law that currently allows certain data center projects to receive partial or full exemptions on sales and use taxes for equipment and infrastructure.
Under current policy, qualifying data center projects — often involving investments of at least $100 million — can receive tax exemptions on equipment such as servers, cooling systems, and power infrastructure if approved by the state.
The proposed legislation would amend that law to prohibit any new exemptions from being granted going forward.
The bill does not eliminate existing agreements already in place. Projects that have already secured tax incentive deals would continue under their current terms, but no new projects would be eligible for the same exemptions if the bill becomes law.
Ohio has increasingly attracted large data center developments in recent years, with projects often tied to major technology companies and energy infrastructure expansion. Supporters of incentive programs have argued that the tax breaks are necessary to compete with other states for high-dollar investments.
However, critics have questioned the long-term economic return of those incentives, particularly given the relatively small number of permanent jobs typically associated with data centers compared to their scale and energy demands.
Current law requires approved projects to meet investment thresholds and payroll benchmarks, including minimum annual compensation levels tied to employees at the site.
The bill comes as debate continues in Ohio over the balance between economic development incentives and public return on investment, especially in rural areas targeted for large-scale data infrastructure projects.
If passed, Senate Bill 374 would mark a significant shift in the state’s approach to attracting data center development by removing one of the primary financial incentives used to secure those projects.
The legislation has been introduced but has not yet advanced through committee.