Tax benefits for hyperscalers and other data center operators are costing local administrations billions of dollars. In the US, three states are already giving away more than $1 billion in potential tax revenue, while 14 are failing to declare how much data center subsidies are costing taxpayers, according to Good Jobs First.
The campaign group said the failure to declare the tax subsidies goes against US Generally Accepted Accounting Principles (GAAP) and that they should, since 2017, be declared as lost revenue.
“Tax-abatement laws written long ago for much smaller data centers, predating massive artificial intelligence (AI) facilities, are now unexpectedly costing governments billions of dollars in lost tax revenue,” Good Jobs First said. “Three states, Georgia, Virginia, and Texas, already lose $1 billion or more per year,” it reported in its new study, “Data Center Tax Abatements: Why States and Localities Must Disclose These Soaring Revenue Losses.”
