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Texas is giving data centers more than $1 billion in tax breaks each year
- On Thursday, April 9, 2026, Texas officials revealed the state is forgoing at least $1.3 billion in tax revenue this year due to a sales-tax exemption for the booming data center industry.
- Lawmakers originally authorized the tax break in 2013, authored by former State Rep. Harvey Hilderbran, but the artificial intelligence boom has caused annual costs to skyrocket from millions to over $1 billion.
- The Texas State Comptroller's office projects the state will lose over $3 billion in revenue over the next two years, with annual costs forecasted to reach nearly $1.8 billion by 2030.
- State Sen. Joan Huffman, chair of the Senate Committee on Finance, plans to scrutinize the industry during hearings this July, as State Rep. Trey Martinez Fischer warned that ballooning forecasts raise red flags.
- Lawmakers are considering options ranging from repealing the exemption to implementing stricter economic development requirements, mirroring debates in states like Illinois and Virginia over data center incentives.
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19 Articles
19 Articles
According to the Comptroller’s office, Texas will lose $3.2 billion in sales tax revenue over the next two years due to an exemption for the state’s flourishing data center industry. That figure is likely to be a huge understatement, given the explosion of new facilities being built, but it already makes the tax exemption one of the state’s most expensive incentive programs and will soon be the most expensive of its kind in the country. Legislat…
Coverage Details
Total News Sources19
Leaning Left6Leaning Right1Center8Last UpdatedBias Distribution53% Center
Bias Distribution
- 53% of the sources are Center
53% Center
L 40%
C 53%
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