State Tax Incentives for Data Centers in Flux as Concerns Merge

A nationwide boom in data centers was spurred, in part, by tax incentives from states, eager for a stake in an AI-fueled economy. But high energy costs, strained budget coffers, changing corporate investment strategies, and public pushback have some states rethinking their game plan.

In 2026, about two dozen out of the 38 states offering some kind of tax incentive for data centers are considering rolling them back. And the state of play is moving fast.

In just the last few weeks, Ohio Gov. Mike DeWine (R) and Illinois Gov. JB Pritzker (D) ...