Data centers in Ohio have claimed $2.5 billion in tax breaks since 2017, report says 

Signal
by Jake Zuckerman
October 6, 2025

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Data centers in Ohio have received $2.5 billion in state and local tax incentives between 2017 and 2024, according to a new, industry-backed report. 

These tax breaks come from three major places. First, for large scale facilities, there’s an exemption to the state’s 5.75% sales tax. Then there are state job creation tax credits. And finally, local governments usually grant data centers 75% property tax abatements lasting 15- to 30 years. 

The tax break figure came within a larger report analyzing the economic promise, public subsidization, and hefty water and electricity demands of a burgeoning new piece of Ohio’s economy. The report was authored by SRC EvalMetrics, an LLC established by Saurav Roychoudhury, a Capital University professor of finance and economics, on behalf of the Ohio Chamber of Commerce, which represents the state’s business community. 

While available data makes clear the data centers receive generous tax breaks, the figures released last week are the most comprehensive and authoritative. 

Republican lawmakers this year sought to end the state sales tax exemption for data centers – an exemption that applies not just to the facilities, but to natural gas fired power plants or other private, “behind the meter” power sources the data centers own. However, Gov. Mike DeWine vetoed the provision, citing the economic benefits of the industry here. 

The political drama also comes as homeowners in Ohio have seen runaway property tax increases in recent years, a dynamic animating both a major political battle at the statehouse and a citizen-led initiative to eliminate all property taxes in Ohio. 

Amazon, Meta and Google reap the benefits 

The report describes the sales tax exemption as “central” to Ohio’s data center attraction strategy. 

Most of the state and local benefits flow to “hyperscalers” like Amazon Web Services, Meta (formerly Facebook), and Google. Smaller players like QTS, Vantage, Aligned, and EdgeConneX host data for other consumer-facing brands. Together, the racks, computer chips, and cooling fans, built into giant warehouses through Franklin and Licking counties in central Ohio, provide much of the processing power required for the recent surges of artificial intelligence and cryptocurrency. 

Their release comes as data centers – the report counts 179 facilities, while industry consultancy Data Center Maps counts 191 – have drawn scrutiny over their seismic power demands and resulting increases in electricity prices they drive. In Ohio, electric prices have spiked over the past few years, which industry analysts have attributed to the facilities. 

Put simply, the data centers are projected to need exponentially more power than is currently available on the regional electricity grid. And they could drive aggregate water demand to the point of outstripping the supply. 

The report pegs Ohio as the fourth biggest hotbed of data centers in the world in terms of operational capacity. 

Boom town 

The Chamber of Commerce report argues that data centers provide the state a hearty return on its investment (the tax breaks). For instance, the researchers claim that scrapping the data center sales tax exemption would actually reduce total tax collections by $500 million over the next five years as potential incomers decide to develop elsewhere. 

Consider that in 2024:

• Data centers contributed $3.7 billion directly toward the GDP, with billions more if you include “indirect” or “induced” benefits that follow downstream from things like suppliers or restaurants that open to cater to facility workers 
• They employed about 17,300 people in permanent operations roles, and another 19,400 in temporary construction jobs, with thousands more if you include the indirect or induced benefits 
• Despite their tax breaks, data centers still generated about $5.2 billion in taxes between 2017 and 2024. 

The biggest builders in Ohio include Amazon Web Services ($23.8 billion), Google ($7.2 billion), Cologix ($7 billion in planned investments) and Meta ($4 billion). 

Massive new demand for water and electricity

Even under more conservative growth assumptions, Ohio is going to need to spend hundreds of millions of dollars upgrading its water and grid infrastructure to support the emerging big data industry, the report states.

Data centers are ‘power first businesses.’ But rather than manpower, they’re functions of massive sums of electricity to train AI systems; water to cool down the hardware; and a lot of capital to pay for it all up front. 

For that reason, American Electric Power recently waged a legal fight with the industry, asking that it absorb more of the costs of grid buildouts necessary to fuel the scores of data centers clustered in its service territory. 

However, AEP only projected an 800% power demand increase up to 5 gigawatts of power by 2030. The report projects an even larger 7.6 GW. The Business Roundtable, a group representing CEOs, estimates a whopping 16GW by 2034. 

Other states with a lot of data centers mix renewable energy into their grid at scale, which reduces the industry’s dependence on fossil fuels that cause climate change. For instance, the electric grid in Virginia, a major data center player, is 18% renewable. In Arizona and Texas, that’s 36% and 28% respectively.

In Ohio, where restrictive, anti-renewable laws have dramatically chilled investment and development in the solar industry, that figure is a paltry 3.6%. 

The water situation also must be immediately addressed in parts of the state, the report states. Citing the Central Ohio Regional Water Study, published by the Ohio EPA and Division of Natural Resources, the Chamber of Commerce report acknowledges serious threats to the water supply. 

“Under the most likely scenario, the region will face 56 discrete resource-gap events by 2040, with industrial demand growth driving 34% of all water infrastructure,” it states, referring to instances where demand for water outstrips the supply. 

Over the next 15 years, that means Ohio will need to spend between $350 million and $455 million on new water infrastructure, otherwise “water may become a binding constraint on data center growth.”