The tax break ended up costing over $1 billion more than lawmakers expected. 

On Wednesday, Ohio Governor Mike DeWine announced that he is pausing a sales tax break for data centers after the exemption ended up costing $1 billion more than lawmakers were prepared for. 

Then on Thursday, DeWine directed the Ohio Tax Credit Authority to stop accepting data center tax exemption requests. Lawmakers are set to study the industry’s growth in light of the staggering $1 billion figure. 

In 2025, the Ohio Department of Taxation projected the endeavor would cost approximately $136 million. The total for 2025 ended up being dramatically higher at more than $1.5 billion. 

DeWine issued a statement on the recent change, highlighting the value that data centers add to the Ohio economy. 

“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. Data centers that have previously been granted sales and use tax benefits in Ohio have reported a total capital investment of $27.2 billion in 2025.”

DeWine went on to put his support behind lawmakers’ work to study the growth of the data center industry in Ohio as a response to the overwhelming demand for tax breaks. 

“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 said. 

Ohio currently has over 200 data centers. They have brought increased jobs and economic benefits to the region, but DeWine is pressing pause on the tax breaks in light of their surprising price tag. 

The Ohio Tax Credit Authority is set to consider one last tax exemption at its Monday meeting, but will then stop accepting new requests. 

The Ohio Chamber of Commerce issued a statement opposing DeWine’s decision to suspend the exemption option for data centers. 

“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,” the chamber said in a statement. “That’s why we are disappointed to learn of the recently announced pause on the sales and use tax exemption for data centers,” the Chamber said. 

Those in opposition remain concerned that removing the valuable incentive will cause Ohio to fall behind in data center development, an area where the state has emerged as a national leader.

“This action only suspends the ability for data centers to request tax exemptions in Ohio; it is not a data center ban,” DeWine said.