Wisconsin Tax Exemption for Data Centers Costs State $2 Billion

The Wisconsin Legislative Fiscal Bureau projects that a sales tax exemption for data centers, established in the 2023-2025 state budget, will cost the state more than $2 billion in forgone revenue. This estimate consists of $1.5 billion in lost state sales tax during the construction phase and $369 million in annual losses once the facilities become operational.

The tax break benefits several massive infrastructure projects, including a $20 billion complex in Mount Pleasant, a $15 billion facility in Port Washington, a $1 billion project in Beaver Dam, and an Epic data center project in Verona.

State Senator Jodi Habush Sinykin requested the fiscal estimate and has called for an extraordinary session to implement increased regulation or environmental requirements in exchange for these tax incentives. Conversely, industry supporters and policy groups argue the incentives were necessary to attract significant capital investments and contend that the state will recoup the losses through corporate income taxes, utility taxes, and indirect spending generated by construction workers.