Which States Are Giving Data Centers the Biggest Tax Breaks?

The United States has long been a leader in the global tech sector, and in recent years, American tech giants have been pouring money into Artificial Intelligence and the data center infrastructure behind the new technology. Between Amazon, Google, Meta, and Microsoft, combined data center spending in 2026 and 2027 is forecast to hit $1.5 trillion. But while Silicon Valley’s enthusiasm shows no signs of slowing, public backlash to the data center boom has become impossible to ignore. 

According to a recent Gallup poll, 71% of Americans either somewhat or strongly oppose local AI data center construction. The poll also found that data center pushback is largely attributable to the potential economic, environmental, and overall quality of life problems these facilities can pose. Indeed, AI data centers are resource intensive facilities that can consume as much electricity as hundreds of thousands of average American homes. They are often powered by fossil fuels and many require millions of gallons of water each day. 

Despite the pushback, many state and local governments have been using tax exemptions as an incentive for major tech companies to build new data centers within their borders. While lawmakers may have seen data centers as a potential economic boon, the lost tax revenue is beginning to add up—in some states, to the tune of hundreds of millions, and even billions, of dollars.

Using data compiled by the Washington, D.C.-based nonprofit Good Jobs First, Climate Crisis 247 identified the states giving the biggest data center tax breaks. We ranked all states with available data on the total estimated lost revenue from data center sale and use tax exemptions in 2026. In the case of a tie, the state with the greatest estimated loss in 2025 ranks higher. Supplemental data on total active- and planned- or under-construction-data centers by state is from the industry publication Aterio, and is current as of August 2026. All other supplemental data, including technical notes on lost revenue estimates, are from Good Jobs First. 

10. Kentucky

• Cost of data center tax exemptions in 2026: $5 million*
• Cost of data center tax exemptions in 2025: N/A
• Total number of active data centers in state: 12
• Total number of data centers announced or under construction in state: 65
• Note: *State level estimates only

9. Connecticut

• Cost of data center tax exemptions in 2026: $6 million*
• Cost of data center tax exemptions in 2025: $5 million*
• Total number of active data centers in state: 7
• Total number of data centers announced or under construction in state: 1
• Note: *State level estimates only

8. New York

• Cost of data center tax exemptions in 2026: $12 million*
• Cost of data center tax exemptions in 2025: $12 million*
• Total number of active data centers in state: 50
• Total number of data centers announced or under construction in state: 77
• Note: *State level estimates only

7. Maryland

• Cost of data center tax exemptions in 2026: $22.0 million*
• Cost of data center tax exemptions in 2025: N/A
• Total number of active data centers in state: 12
• Total number of data centers announced or under construction in state: 31
• Note: *Cost estimates disclosed through freedom of information requests due to lapse in tax expenditure reporting

6. Tennessee

• Cost of data center tax exemptions in 2026: $105 million*
• Cost of data center tax exemptions in 2025: $104 million*
• Total number of active data centers in state: 32
• Total number of data centers announced or under construction in state: 11
• Note: *Estimated state and local sales tax revenue losses

5. Pennsylvania

• Cost of data center tax exemptions in 2026: $115 million*
• Cost of data center tax exemptions in 2025: $41 million*
• Total number of active data centers in state: 40
• Total number of data centers announced or under construction in state: 307
• Note: *State level estimates only

4. Minnesota

• Cost of data center tax exemptions in 2026: $115 million*
• Cost of data center tax exemptions in 2025: $114 million*
• Total number of active data centers in state: 28
• Total number of data centers announced or under construction in state: 54
• Note: *State level estimates only

3. Washington

• Cost of data center tax exemptions in 2026: $132 million*
• Cost of data center tax exemptions in 2025: $112 million*
• Total number of active data centers in state: 70
• Total number of data centers announced or under construction in state: 31
• Note: *State level estimates only

2. Texas

• Cost of data center tax exemptions in 2026: $1.3 billion*
• Cost of data center tax exemptions in 2025: $1 billion*
• Total number of active data centers in state: 229
• Total number of data centers announced or under construction in state: 1013
• Note: *State level estimates only

1. Georgia

• Cost of data center tax exemptions in 2026: $2.5 billion*
• Cost of data center tax exemptions in 2025: $1.9 billion*
• Total number of active data centers in state: 68
• Total number of data centers announced or under construction in state: 419
• Note: *Estimated state and local sales tax revenue losses