(COLUMBUS) - Ohio Governor Mike DeWine has paused new sales tax exemptions for large-scale data center projects after state leaders raised concerns that existing incentives have reduced state revenue by more than $1 billion over the past year.
The pause applies to future tax exemption requests. Existing agreements will remain in effect.
Members of the Ohio Legislature's Joint Data Center Committee said the reported revenue impact prompted a closer review of the state's incentive program.
Advocacy group Conserve Ohio, which is pursuing a ballot initiative that would ban data centers in the state, argued the reported revenue loss highlights concerns about oversight and transparency.
Critics have also raised questions about environmental impacts and nondisclosure agreements between data center developers and local governments.
The debate comes as Ohio continues to attract major data center investments. Before announcing the pause, DeWine approved a separate 10-year, 50% sales tax exemption for a Cologix data center project in Delaware and Licking counties because the application had already been submitted.
The Joint Data Center Committee is expected to continue reviewing the state's tax incentive policies in future hearings as lawmakers consider the financial, environmental and transparency issues surrounding continued data center growth.