Tennessee lawmakers do not know how much revenue the state gives up each year to data center sales tax breaks. That is not an estimate problem. It is a reporting problem written into state law, and a bill planned for the 2027 legislative session would force the Department of Revenue to start counting.
State Rep. Aftyn Behn plans to file what she is calling the Blank Check to Data Centers Act, which would pause new sales tax exemptions for qualifying data centers for three years while the Department of Revenue tracks the actual cost, according to WZTV Nashville. The bill would also require data centers to report electricity purchases separately and would make public the name and county of every facility receiving the break.
Right now, none of that information exists in a form the public can see.
What Tennessee currently gives away, and what it does not track
Under Tennessee law, a data center qualifies for a sales tax exemption on equipment purchases after meeting significant investment and job creation thresholds. The state currently has active exemption certificates in place, according to figures Behn obtained from the Department of Revenue.
Which companies? Which counties? The department says state taxpayer privacy laws prevent it from releasing that information.
How much sales tax revenue is forgone each year? The department reports one combined total for all sales tax breaks, not a separate line for data centers. Purchases made under the exemption are not reported separately at all.
How much electricity tax revenue is forgone? Data center power purchases are lumped together with other businesses that receive the same lower rate, so the state cannot isolate the figure.
Behn’s framing of the gap is direct: Tennessee taxpayers do not know how much revenue the state is losing from the data center industry, because the law was never written to track it.
Why the disclosure question is not academic
Other states that finally opened their books have found the actual costs run several times higher than the fiscal notes attached to the original legislation. The pattern is documented in a multi-state analysis published in August 2026 drawing on state disclosures compiled by the watchdog group Good Jobs First.
Georgia projected its data center sales tax exemption would cost $186 million in fiscal year 2025. The final tally for fiscal year 2026 came in at $2.5 billion, a 664 percent overshoot of the state’s original baseline, per the same analysis. An audit found many of the projects receiving the exemption would have located in Georgia anyway.
Ohio’s numbers are the ones Tennessee legislators are most likely to hear about. The Ohio Department of Taxation disclosed that state sales tax exemptions for data centers cost Ohio $1.57 billion in calendar year 2025, more than 11 times the state’s original forecast of $135.8 million, as reported by Hoodline. Local governments in Ohio lost an estimated $166.8 million in uncollected local sales tax revenue on top of the state figure.
Ohio Governor Mike DeWine paused new data center tax agreements in 2026, and has said the freeze will remain until he leaves office. U.S. Senator Bernie Moreno of Ohio has floated federal legislation that would impose a 100 percent federal tax on any state or local data center incentive, effectively clawing back the benefit from the company that received it. He has not yet introduced the bill.
Indiana is the disclosure story closest in shape to Tennessee’s. It had never reported its data center exemption costs. Once it did, mid-2026 filings showed the state had lost $655 million to date, with more than 83 percent of the 2025 figure flowing to a single Amazon subsidiary, according to Good Jobs First’s June 2026 analysis cited in the techtimes.com reporting.
The local fight in Nashville and Gallatin
The revenue question is arriving in Tennessee at the same time as the siting question. Nashville and Gallatin are grappling with data center proposals and potential regulations, per WZTV’s reporting.
Resident concerns in the WZTV piece cluster around water use, noise, and grid strain — the same complaints driving preemptive moratoriums in Washington state and freezes in Iowa. The water figures are not abstract. U.S. data centers consumed more than 264 billion gallons in 2025 during a period when nearly 63 percent of the country was in drought.
Behn’s bill treats the fiscal question and the siting question as connected. Without a per-facility cost figure and a public list of recipients, neither Metro Council members in Nashville nor Gallatin’s board can weigh a specific project against a specific tax loss. They can only argue in the abstract.
What the bill would and would not do
The Blank Check to Data Centers Act, as Behn has described it, would do four specific things during a three-year window. Pause new sales tax exemption certificates for qualifying data centers. Require data centers to report their electricity purchases separately from other businesses on the reduced rate. Require the Department of Revenue to publish, annually, how much sales tax and electricity tax revenue the state is forgoing from qualified data centers. Require public disclosure of the name and county of each facility receiving the break.
What the bill would not do is repeal the underlying exemption or claw back benefits from existing certificates. Tennessee, like Ohio, would still be bound by agreements already in force. Ohio’s experience is instructive on that point: statewide agreements signed between 2014 and 2018 granted Amazon, Meta, and Google exemptions running up to 40 years, per Ohio House Democrats’ records cited in the Hoodline reporting. Those contracts are largely locked in regardless of what the current legislature does.
The pause is prospective. The disclosure is retrospective and ongoing. Together they would give Tennessee something no fiscal note has ever given it: an actual number.
What happens next
Behn plans to file the bill for the 2027 legislative session, meaning any pause or disclosure requirement is at least a full legislative cycle away from taking effect. In the meantime, the Department of Revenue’s existing reporting practice remains in place, active exemption certificates continue to generate untracked losses, and the companies holding them remain legally private.
Other states have shown what happens when the number finally gets published. Ohio froze new agreements. North Carolina repealed the electricity exemption outright in its 2026 budget, a change the state’s Fiscal Research Division projects will generate $21.4 million in additional General Fund revenue in fiscal year 2026–27, per the techtimes.com compilation.
Tennessee is not there yet. It is at the earlier step, the one where a legislator has to file a bill just to find out what the state is spending.