Niagara County Demands Audit of Data Center Tax Exemptions

The Niagara County Legislature unanimously passed a resolution on August 5, 2026, calling on Governor Kathy Hochul to order an independent audit of the Internet Data Center Sales Tax Exemption. Local officials argue that the decades-old exemption is being wrongly claimed by facilities, specifically citing Lake Mariner in the Town of Somerset, which they claim has resulted in the loss of millions in state and local tax revenue.

Niagara County Manager Nick Updegrove stated that Lake Mariner does not function as an internet web hosting facility as intended by the original law. Updegrove suggested that the state's estimated $1.2 million loss from the exemption is significantly understated and argued that the misuse of the exemption harms the state and Niagara County taxpayers.

The county is requesting that the New York State Department of Taxation and Finance conduct a comprehensive audit and issue a public report. This report would detail which companies currently receive the exemption, whether AI and cryptocurrency data centers qualify for the benefit, and the total amount of revenue abated by the State of New York.