Ohio data center tax break cost $1.4 billion more than expected in 2025

Ohio’s data center sales tax exemption has far exceeded state estimates, costing $1.6 billion in 2025—eleven times the projected $136 million. The exemption, which waives the 5.75% statewide sales tax, also cost $555 million in 2024, four times the forecast. Major tech firms like Meta, Alphabet, and Amazon have built or expanded data centers in Ohio, benefiting from the policy. The Ohio Department of Taxation confirmed the figures, noting that lost local sales taxes added another $166.8 million in 2024. Spokesperson Andrea Lannom explained that earlier data couldn’t be released due to taxpayer confidentiality, and the rapid growth of the industry made accurate forecasting difficult. State lawmakers had previously voted to end the tax break in the 2025 budget to fund income tax cuts, but Governor Mike DeWine vetoed the measure, arguing it was essential for attracting data center developers. A DeWine spokesperson declined further comment after reviewing the new data. House Speaker Matt Huffman, a Republican, has said he may seek votes to override the veto but lacks sufficient political support. Economist Zach Schiller of Policy Matters Ohio had long warned of underestimates in tax department forecasts, though he expressed surprise at the scale of the shortfall. He questioned whether Ohio could legally exit existing contracts with developers or halt new tax breaks. The discrepancy highlights broader concerns about transparency and fiscal responsibility in Ohio’s economic incentives for tech companies.