Ohio to Halt Data Center Tax Credits as Opposition Grows

Ohio will pause incentives for future data center projects, following a directive from the governor to halt the tax credits while a committee studies the impact of the projects on the state’s economy.

The pause is not a complete ban but a suspension of requests from facilities for state tax breaks, Governor Mike DeWine said in a statement Wednesday.

The Ohio Tax Credit Authority, the body that oversees issuing the perks, will stop accepting new applications after its next meeting on June 1. Data centers previously incentivized by the state had a total capital investment of $27 billion last year, DeWine added.

A legislative committee focusing on the centers will study the issue during the moratorium.

“I fully support the Ohio General Assembly’s work to study the issue and bring forward facts about data centers, including the local benefits to communities when tax exemptions are granted,” DeWine, a Republican, said in the statement.

“As this work is ongoing, I believe it is appropriate for the Ohio Tax Credit Authority to pause its consideration of new data center tax exemptions while the full impact of data center growth in Ohio is being reviewed,” he added.

Data centers have become increasingly steeped in controversy as local organizations across the country seek to halt projects due to concerns about water and power usage. About $64 billion of data centers projects have either been canceled or delayed because of community opposition, according to industry researcher Data Center Watch.

The move in Ohio comes after Illinois Governor JB Pritzker, a Democrat, asked the state’s General Assembly in February to freeze all incentives for data centers for two years.

A separate effort started by grassroots group Conserve Ohio is collecting signatures for a ballot measure that would amend the state constitution to ban new data centers that consume more than 25 megawatts of energy a month.

Developers are having to invest more time and money to persuade communities of the economic benefits of the projects. In April, Brookfield Asset Management-backed Compass Datacenters pulled out of its years-long effort to build a portion of a 2,100-acre data center campus in Virginia after the development faced intense pushback.

Photo: An Amazon Web Services data center next to soccer fields in Dublin, Ohio, US, on Saturday, March 23, 2024. Amazon.com Inc. plans to spend almost $150 billion in the coming 15 years on data centers, giving the cloud-computing giant the firepower to handle an expected explosion in demand for artificial intelligence applications and other digital services.