Ohio's data center sales tax exemption is still frozen, and it will stay frozen until a new governor takes office. On August 5, 2026, Gov. Mike DeWine told reporters that the pause he ordered in May will continue until he leaves office in January 2027, leaving the future of the exemption to his successor and to a General Assembly that does not return to Columbus until after the November 3 election.
Key Takeaways
| 01 | The exemption survived the summer, but it is frozen through January 2027. The Tax Credit Authority stopped accepting new data center exemption proposals after its June 1, 2026 meeting, and on August 5 Gov. DeWine said the pause "will continue until I leave office." The pause suspends new awards only. It is not a data center ban, and it does not touch executed agreements. |
| 02 | A $1.4 billion forecasting miss forced the issue. The Ohio Department of Taxation projected the exemption would cost $136 million in 2025. Actual state revenue forgone was $1,568.7 million, 11 times the estimate, after $554.9 million in 2024 plus $166.8 million in forgone local sales tax that year. |
| 03 | Three legislative paths are on the table: end it, cap it, or mend it. House Bill 957 and Senate Bill 374 would close the exemption to new projects (October 1, 2026 and October 1, 2027, respectively). Substitute House Bill 646 would cut the exemption to 50%, with 75% available for brownfield siting or self-supplied power. The committee produced no third-path report. Its testimony record is being folded into H.B. 646. |
| 04 | Existing agreements are largely insulated, for now. Every pending bill operates prospectively. Agreements held by Amazon, Meta, and Google run through at least 2055, 2056, and 2058, and Sen. Kent Smith (D-Euclid) noted that "76% of the market is not affected" by prospective changes. Co-chair Sen. Brian Chavez (R-Marietta) put it more bluntly: "that cake is baked and half eaten." |
| 05 | November is the month to watch. Both chambers are out until after November 3, when Ohioans elect DeWine's successor. A new bill filed July 28, H.B. 983, would add local-approval and property-tax restrictions to the pending mix. |
The freeze began on May 27, 2026, when DeWine directed the Ohio Tax Credit Authority to stop considering new data center exemption requests while the legislature's Joint Data Center Committee studied the industry's growth. The committee, an eight-member panel drawn from both chambers and both parties, took roughly 20 hours of testimony between May 27 and mid-June from state agencies, utilities regulators, local officials, environmental groups, more than 100 members of the public, and lobbyists for Amazon, Google, Meta, and Microsoft.
Ohio is not alone. Illinois paused new data center incentives effective July 1, 2026. Arizona suspended its data center sales tax exemption for three years, from July 1, 2026 through June 30, 2029. Maine's LD 713, signed April 23, 2026, excludes data centers from the Business Equipment Tax Exemption and Dirigo programs.
The committee's mandate was fact-finding, and it stayed that way. Announced May 13, 2026 and co-chaired by House Energy Committee Chair Rep. Adam Holmes (R-Nashport) and Senate Energy Committee Chair Sen. Brian Chavez (R-Marietta), the panel also seats Reps. Thad Claggett (R-Licking County), Heidi Workman (R-Rootstown), and Chris Glassburn (D-North Olmsted) and Sens. Bill Reineke (R-Tiffin), Shane Wilkin (R-Hillsboro), and Willis Blackshear Jr. (D-Dayton). Its mission statement assigns five tasks: (1) energy cost and grid-reliability impacts on other Ohio ratepayers, (2) state and local economics, including tax base, local revenue, and jobs, (3) environmental impacts, including water use and land use, (4) public safety and national security considerations, and (5) public awareness. It first met on May 27, 2026, the day DeWine announced the pause.
No statutory deadline required a written report, and none was produced. The committee's hearings ran through mid-June. State agencies, including the Ohio Environmental Protection Agency, the Ohio Department of Natural Resources, the Public Utilities Commission of Ohio (PUCO), and the Department of Development, testified on May 27. More than 100 members of the public testified on June 1, lobbyists for Amazon, Google, Meta, and Microsoft on June 4, and county commissioners, farm groups, and building trades on June 8. By June 18 the Senate majority caucus summarized the record as 20 hours of testimony and stated that "the work continues on developing the policy as part of HB 646." DeWine's May 27 order tied the freeze to the period while the committee studied data center growth, and on August 5 he removed the ambiguity by extending it through the end of his term regardless.
What the record does show is where the pressure points are. PUCO Chair Jenifer French told the committee that AEP Ohio reported in 2024 that it had received requests for more than 30,000 megawatts (MW) of data center load, and announced in February that it had signed 5,642 MW under the data center tariff PUCO approved in July 2025. The tariff requires collateral, a minimum demand charge, contracts of at least 8 to 12 years, and exit fees. Non-disclosure agreements (NDAs) drew criticism from residents and committee members. Holmes said NDAs were "causing a lot of the distrust and anxiety," and Workman told the tech lobbyists, "You're doing a terrible job actually selling your product on the public scale." Google's Liz Schwab countered that local governments "have all the local control and authority to determine how these projects or if these projects move forward." Committee members did not reach consensus on the exemption itself. Members pressed the companies on June 4 about tax incentives and electric and water use, and the Statehouse News Bureau's headline on that hearing was that questions were "left unanswered."
"We can't go back, that cake is baked and half eaten."
Sen. Brian Chavez (R-Marietta), committee co-chair, on the Kasich-era agreements with Amazon, Meta, and Google
Source: The Statehouse News Bureau, June 11, 2026.
The exemption's actual 2025 cost ran 11 times the forecast. Under Ohio Revised Code Section 122.175, data center projects investing at least $100 million over three years and paying at least $1.5 million in annual Ohio payroll can receive a partial or complete exemption from the state's 5.75% sales and use tax on eligible equipment. The terms are set in Tax Credit Authority agreements, some of which run into the 2050s. Exhibit 1 shows the gap between projections and actual cost in Ohio Department of Taxation data that Signal Ohio reported on May 21, 2026.
Exhibit 1
Data center exemption, projected versus actual state cost, 2024 and 2025
| Year | Projected cost (state) | Actual cost (state) | Reported capital investment |
|---|---|---|---|
| 2024 | $130M | $554.9M (+$166.8M local) | $9.6B |
| 2025 | $136M | $1,568.7M | $27.2B |
Sources: Ohio Department of Taxation actuals as reported by Signal Ohio, May 21, 2026; 2024 projection from the Ohio tax expenditure report as reported by News 5 Cleveland, May 25, 2026; Office of Gov. DeWine, May 27, 2026.
The governor's office and its critics read the same numbers differently. DeWine's announcement framed the $27.2 billion of 2025 capital investment as evidence that data centers are a "critical component to today's technology-driven economy." Policy Matters Ohio called the pause "a clear acknowledgment that something has gone seriously wrong" and urged lawmakers to examine "how existing commitments could be scaled back or restructured." The fight is not new. The legislature voted to end the exemption for new agreements in the June 2025 budget bill, DeWine vetoed the provision, and Speaker Matt Huffman (R-Lima) has said he lacks the votes to override. Six days after the Signal Ohio story, DeWine announced the pause, and Rep. Tristan Rader (D-Lakewood) introduced H.B. 957 the same day.
One last award was approved before the pause. At its June 1 meeting, the Tax Credit Authority approved a $42.3 million exemption for Cologix Inc. covering two Columbus-area projects in Delaware County and Johnstown, backed by $1.17 billion of investment and 90 full-time jobs by 2035. The governor's office treated it as already in process and therefore outside the pause. That award brings the state's committed exemption cost since 2025 to roughly $2.17 billion, and it is the last one the authority will consider until at least January 2027.
Exhibit 2 lists each pending vehicle, what it would do, and where it stands.
Exhibit 2
Ohio data center exemption bills, status as of August 6, 2026
| Scenario | Vehicle | What it would do | Status (Aug. 2026) |
|---|---|---|---|
| End | H.B. 957 (Rader, D-Lakewood; 10 cosponsors) | End the exemption for new projects effective Oct. 1, 2026 | House Ways and Means since June 3; no hearings |
| End (slower) | S.B. 374 (Smith, D-Euclid; Blessing, R-Colerain Twp.) | No new exemptions for data centers after Oct. 1, 2027 | Senate Finance since Mar. 25; no hearings |
| Cap | Sub. H.B. 646 (Click, R-Vickery; Deeter, R-Norwalk) | Cut exemption to 50% (75% for brownfield siting or self-supplied power); cap local abatements at 50%; PUCO data center rate class; water reporting; NDAs remain subject to current law | Reported 8-3 by Senate Energy June 10, recommitted same day; parked until November |
| Mend | Joint Data Center Committee | Fact-finding on ratepayers, revenue, water, security, and public awareness | Hearings closed mid-June; no written report; record folded into H.B. 646 |
| Local restrictions | H.B. 983 (Gross, R-West Chester; 5 cosponsors) | Voter approval within five miles of any 1 MW+ project; bar local property tax incentives; public disclosure of all agreements | Introduced July 28; awaiting referral |
Sources: Ohio Legislature bill pages; LegiScan.
The cap scenario reached the Senate floor in June. H.B. 646 passed the House 97-0 on March 18, 2026 as a modest study-commission bill. On June 9 and 10 the Senate Energy Committee rewrote it into a sweeping regulatory package, reported it 8-3, and leadership floated a floor vote the same day. It was recommitted within hours. The sticking point was the exemption: some House members wanted it eliminated outright rather than halved and objected to any bill that extended it in reduced form. The Senate will not reconvene before November, so the bill waits in Senate Energy until then.
The end scenario has bipartisan sponsors but no hearings. H.B. 957 carries one Republican cosponsor, Rep. Justin Pizzulli, alongside Rader and nine other Democrats. S.B. 374 is co-led by Republican Sen. Louis Blessing. Neither has been scheduled. Chavez has said the Kasich-era agreements cannot be undone, and the Department of Development told the committee that recent deals have generally been structured at a 50% exemption for 10 to 15 years.
The mend scenario has become a legislative drafting exercise. The Senate majority caucus has said the work continues as part of H.B. 646. H.B. 983, introduced July 28, pushes in the opposite direction from the industry: local voter approval, no local property tax incentives, and mandatory disclosure of every agreement.
"That will continue until I leave office."
Gov. Mike DeWine, on the Tax Credit Authority pause, speaking to reporters on August 5, 2026
Source: The Statehouse News Bureau, August 6, 2026. Photo: official portrait, Office of the Governor of Ohio.
Both major-party candidates for governor have called for restrictions, and neither has promised to lift the pause. Republican nominee Vivek Ramaswamy's three-part plan would require data centers to cover residential customers' electric costs through credits, pay full property taxes with no local abatement, and meet environmental standards, with a preference for brownfields over farmland. "If any one of these three conditions is not met, the data center won't be built. Period," he said, according to Signal Ohio. Democratic nominee Amy Acton proposes a conditional moratorium requiring companies to cover all costs, build with union labor, and site on brownfields. Whoever wins will also fill seats on PUCO, which approved the data center tariff, as its commissioners' staggered five-year terms expire.
No new exemptions will be awarded before a new governor is sworn in, and the legislature may rewrite the program before the queue reopens. On $500 million of exemption-eligible equipment, Ohio's 5.75% state rate alone is $28.75 million. The difference between a 100% and a 50% exemption is $14.4 million on a single phase. Sub. H.B. 646's 75% tier, available for brownfield sites and self-supplied generation, would restore $7.2 million of that on the same example.
Executed agreements are grandfathered in every pending bill. For holders, the exposure sits in compliance with the investment and payroll commitments and reporting in their agreements. Policy Matters Ohio has called for restructuring existing commitments, and Development Director Lydia Mihalik has suggested the state could try to renegotiate, though "they're going to make those decisions based on the best movement forward for their business."
Local property tax abatements are also in play. H.B. 646 would cap local abatements at 50%, H.B. 983 would eliminate local property tax incentives for data centers, and Ramaswamy's plan would end them as well. Exhibit 3 sets out the dates from the House vote on H.B. 646 in March through the handoff to a new governor in January 2027.
Exhibit 3
Ohio data center exemption actions and scheduled dates, March 2026 to January 2027, as of August 6, 2026
| Date | Action |
|---|---|
| Mar. 18, 2026 | H.B. 646 passes House 97-0 as a study-commission bill |
| May 21, 2026 | Signal Ohio reports $1,568.7M actual 2025 cost vs. $136M forecast |
| May 27, 2026 | DeWine orders Tax Credit Authority pause; committee holds first hearing; H.B. 957 introduced |
| June 1, 2026 | Tax Credit Authority approves final pre-pause award ($42.3M, Cologix) |
| June 10, 2026 | Senate Energy reports Sub. H.B. 646 (8-3), then recommits it; Senate recesses |
| June 18, 2026 | Senate caucus summarizes committee's 20 hours of testimony; no report issued |
| July 28, 2026 | H.B. 983 (local approval, no local incentives) introduced |
| Aug. 5, 2026 | DeWine: pause "will continue until I leave office" |
| Oct. 1, 2026 | H.B. 957's proposed cutoff date for new exemption agreements |
| Nov. 3, 2026 | Ohio elects DeWine's successor; lame-duck session follows |
| Dec. 31, 2026 | 136th General Assembly ends; unpassed bills die and must be reintroduced |
| Jan. 2027 | New governor inherits the pause and decides whether to reopen the queue |
Sources: See References below.
This is for any company with a pending Ohio exemption application, an executed agreement, or a site decision that assumed the full exemption and a local abatement. The Tax Credit Authority will not consider new awards before January 2027, and the lame-duck session after November 3 is the current legislature's only window to act. If you want a read on fit before the General Assembly returns in November, reach out to our team.
© Copyright 2026 TC Policy Group, LLC (d/b/a Crawford Partners). The views expressed herein are those of the author(s) and not necessarily the views of Crawford Partners, its management, its subsidiaries, its affiliates, or its other professionals. Crawford Partners is not a law firm and cannot provide legal advice.