What Tax Incentive Does Ohio Give Data Centers?

Ohio Revised Code §122.175 authorizes the Ohio Tax Credit Authority to grant qualifying data centers a complete or partial exemption from state and local sales and use taxes on eligible data-center equipment.

For projects beginning in or after 2015, eligibility requires at least $100 million in qualifying capital investment over three consecutive calendar years. The project also must reach at least $1.5 million in annual payroll subject to Ohio withholding at the project site for each year of the agreement beginning after the first 24 months.

The exemption can apply broadly. Ohio law includes equipment used to conduct the data-center business, cooling systems, equipment used to generate, transform, transmit, distribute or manage electricity for the facility, and building and construction materials incorporated into the data center. The Tax Credit Authority determines the exemption percentage and agreement term, and the exemption can be as high as 100% of the otherwise applicable tax.

The fiscal scale has grown rapidly. In a 2026 fiscal note, the Ohio Legislative Service Commission reported Department of Taxation estimates of $555 million in foregone sales/use tax revenue in calendar year 2024 and $1.57 billion in calendar year 2025. Those figures are estimates of tax revenue not collected because of the exemption – not cash payments to data-center companies.