Ohio’s data center sales tax exemption cost the state nearly $1.6 billion last year, and Governor DeWine has now frozen it through the end of his term, leaving the next governor to decide whether taxpayers ever see a return

Ohio’s sales and use tax exemption for data center equipment cost the state nearly $1.6 billion in foregone revenue in 2025 — $1.568 billion, on the state’s own accounting — and Governor Mike DeWine has now frozen new awards through the end of his term. The decision about whether to renew, reshape, or kill the exemption lands on whoever wins in November.

DeWine directed the chair of the Ohio Tax Credit Authority to stop taking new data center exemption requests on May 27, and on August 5 he told reporters the freeze would outlast him. “That will continue until I leave office,” he said, in remarks published the following day by The Statehouse News Bureau. What happens after that is the open question shaping the governor’s race, a revived ballot campaign, and a stalled legislative package that would have reshaped how Ohio charges data centers for electricity and water.

What alarmed the Statehouse was not the size of the number so much as its slope. The exemption cost $554.9 million in 2024 and $1.568 billion in 2025, against state estimates of roughly $133 million a year — roughly eleven times what tax officials had projected. Ohio has now committed somewhere north of $2.1 billion in data center sales tax exemptions, and because the exemptions are uncapped, state documents warn the eventual total could run higher still.

The structural reason is a set of contracts nobody was watching. Ohio created the exemption in 2013, and between 2014 and 2018, under Governor John Kasich, Amazon, Meta and Google each signed statewide agreements granting a 100% sales tax exemption on data center equipment anywhere in Ohio, for as long as 40 years if the company hit its investment targets. Signal Ohio, reviewing Department of Development records, found exemptions worth $600 million each, running as late as 2058. Those three companies, according to cleveland.com’s review of the contracts, account for roughly three-quarters of Ohio’s data center development — which means almost any reform of the tax break barely touches the largest beneficiaries.

Property tax abatements sit on top of that, negotiated municipally through Community Reinvestment Areas. In New Albany, the state’s data center hub, the city council exempted Microsoft and Meta from local property taxes for 15 years, and Amazon Web Services secured a 30-year abatement — nothing for the first 15 years, then 75% relief for the next 15.

The freeze also arrived a few days late. On June 1, the Tax Credit Authority met one final time and approved a $42.3 million exemption for two Cologix data centers in Delaware and Licking counties, a project DeWine explicitly carved out of his own moratorium on the grounds that it was already in the works.

The legislative fix collapsed before summer recess. The bill lawmakers were negotiating, House Bill 646, would have created a separate electric rate class for data centers, capped local tax abatements at 50%, and regulated their water use — but House objections to extending the sales tax break killed the talks. The Statehouse News Bureau reports the amended bill is unlikely to see substantive action before November. What’s left is a policy vacuum with $1.6-billion-a-year fiscal weight. The exemption is frozen but not repealed. The Kasich-era agreements remain in force. Local abatements continue to be negotiated town by town. And the grassroots campaign to ban large data centers by constitutional amendment, having missed the July 1 signature deadline for this November, is now aiming at the 2027 ballot.

Both major candidates for governor have published data center plans, and both are careful to talk about the future rather than the money already gone. Democratic nominee Amy Acton, a former director of the Ohio Department of Health, announced her support for a conditional moratorium on July 27. Under her framework, a new data center could proceed only if it covered 100% of its own gas, water and electricity costs; used union labor to build and maintain the facility; built on former industrial land rather than farmland; signed a community benefit agreement; and abandoned the non-disclosure agreements that have kept residents from learning who is negotiating in their township. On incentives, her platform pledges to add clawback provisions to protect Ohio taxpayers, tied to developers who miss their job promises. It does not, as Signal Ohio noted in its review of the plan, propose ending or reducing the exemption itself — and clawbacks on contracts signed a decade ago face legal and political barriers her plan does not address.

Republican nominee Vivek Ramaswamy went further on the utility question but not on the recovery question. In an August 6 announcement, he pledged that new data centers would have to generate their own power through dedicated gas or nuclear plants and pass the surplus to neighbours, so that homeowners inside a designated benefit zone would pay nothing at all for household electricity. He also proposed banning future local property tax abatements for data centers and rerouting that revenue into rebates for homeowners. If any of his three conditions went unmet, he said, “the data center won’t be built.” He pledged to sign an executive order pausing new approvals on his first day in office, then work with the legislature to codify the standard.

Both plans, in other words, address what future data centers should pay. Neither proposes a mechanism to recover the roughly $1.6 billion Ohio forewent in 2025, or the compounding total still running under existing agreements — and as Signal Ohio observed, neither candidate has called for ending the sales tax exemption at all. Both plans also require legislative action to fully implement: the same legislature that could not agree on reform in June. Opposition has hardened across Ohio communities, with residents raising energy costs, water use, and quality of life, and a string of townships and villages passing local moratoriums. That pressure has not yet produced a proposal aimed at the money already spent.

The plain accounting question — what does the state receive in exchange — is harder to answer than the incentive documents suggest. The capital investment is real: DeWine’s own announcement noted that data centers granted sales and use tax benefits reported $27.2 billion in total capital investment in 2025. So is the construction employment, which building trade unions have cited throughout the debate. Permanent employment is a different figure. Data centers are capital-intensive and staff-light once operational, which is why the per-job math looks the way it does: Policy Matters Ohio calculated that the original Meta and Google exemptions worked out to more than $1 million per job created. The Cologix deal approved in June follows the pattern — $42.3 million in exemptions against a commitment to hire 90 full-time workers, or about $111,000 per job. Ohio’s statewide exemption is not structured as a per-job subsidy at all, which is part of what makes the return question so difficult to answer in public.

So here is the direct message. Ohio taxpayers gave up nearly $1.6 billion in a single year to subsidise data center equipment for some of the most valuable companies on earth. DeWine froze the program rather than defend it, and handed the bill to his successor. The legislature had a chance to reshape the deal in June and proved it could not. Both candidates competing to inherit the problem have published plans that touch only the next data center built — not the tab still running from the last decade. Ohio already paid. The tab is still running. And nobody on the ballot is offering a plan to get whole.

Ohioans vote on November 3.