As artificial intelligence continues its rapid expansion, Ohio lawmakers are taking a closer look at one of the state’s most generous business incentives: tax breaks for data centers.

A bill currently being considered in the Ohio General Assembly would eliminate sales tax exemptions for new data center projects beginning Oct. 1, signaling a potential shift in how the state approaches one of the fastest-growing sectors in the technology economy.

The proposal comes amid growing concerns over the cost of incentives, energy consumption, land use, and the long-term impact of massive data center developments across the state, according to an Ohio Society of CPAs article.

Data centers are the massive facilities that power cloud computing, internet services and increasingly, artificial intelligence systems. Companies such as Amazon, Google, Microsoft and Meta have invested billions of dollars in Ohio data center projects over the past several years, helping make the state one of the nation’s leading destinations for digital infrastructure.

Supporters of the tax incentives argue that attracting these facilities creates construction jobs, generates economic activity and positions Ohio as a leader in emerging technologies. Data center projects receiving tax incentives reported more than $27 billion in capital investment in Ohio during 2025 alone, WBNS 10-TV Columbus reports.