Staff report

Gov. Mike DeWine’s order this week to pause all sales-tax exemptions for new data centers in Ohio has drawn staunch opposition and qualified support from two major state institutions.

The governor on Wednesday directed the chair of the Ohio Tax Credit Authority to pause consideration of any new data center tax exemption requests while the Ohio General Assembly’s Joint Data Center Committee studies the growth of data centers in Ohio.

DeWine’s order followed reporting by The Associated Press and Signal Ohio last week that the sales-tax break had cost state coffers more than $1.5 billion in 2025. That amount represented 11 times the sum estimated by the Ohio Department of Taxation.

The governor, however, tempered the pause with strong support for the continued growth of data centers in the state.

In his statement on the pause, the governor added, “Data centers are a critical component to today’s technology-driven economy, which depends on the virtual, large-scale exchange of information. One of the reasons Ohio has been so successful in attracting new businesses and creating new jobs is that we have invested in the data infrastructure needed to support complex technological innovation.”

The Ohio Chamber of Commerce, which represents business interests of the state, decried the governor’s action.

In a statement, the chamber said, “With all surrounding states having incentives in place to lure data centers that are comparable to or more expansive than our own, Ohio cannot afford to forfeit the transformational economic gains this industry yields. That’s why we are disappointed to learn of the recently announced pause on the sales and use tax exemption for data centers.”

Chamber president Steve Stivers added, “Ohio is facing a huge opportunity to lead, and making ourselves less business friendly is not the way to maximize it.”

Elsewhere, Policy Matters Ohio, a leading state research institution based in Cleveland and Columbus, offered limited but qualified support to the temporary pause.

“This pause, while welcome, is a clear acknowledgment that something has gone seriously wrong,” Zach Schiller, research director, said in a statement Thursday. “Lawmakers were making decisions based on projections that missed the mark by more than a billion dollars. When the true cost finally came into view, it forced action–but a temporary pause on new applications only begins to address the scale of the problem,” he added.

Policy Matters further urged the state Legislature to abolish the tax break permanently.

Toward that end, state Sen. Kent Smith, D-Euclid, and state Sen. Louis Blessing, R-Colerain Township, are lead sponsors of Senate Bill 374, which is co-sponsored by Senate Minority Leader Nickie J. Antonio. That recently introduced legislation calls for the immediate and permanent termination of the sales-tax holiday granted data centers.

State lawmakers included repeal of the sales-tax exemption in the biennial state budget approved last year, but DeWine vetoed that provision.

In the Legislature, the Ohio Joint Data Center Committee convened for the first time Wednesday to address the long-term economic, environmental and security issues surrounding the 200-plus facilities that blanket the state. It is charged with issuing a final report with legislative recommendations within six months on the future of data centers in the state.