Texas Lawmakers Target Data Center Tax Exemptions

Texas lawmakers are reconsidering a 2014 law that grants significant tax exemptions to data centers following a post-pandemic construction boom. During a Senate committee hearing on Monday, the Texas Comptroller's Office reported that 138 data centers currently hold exemptions, leading to an estimated $3.3 billion in lost tax revenue.

State leaders expressed skepticism over the scale of these incentives. Senator Joan Huffman noted that while the law passed overwhelmingly in 2014, the industry has since become a much different animal. Governor Greg Abbott has also grown critical of the trend, specifically opposing the construction of these facilities in rural areas.

Although the Texas Legislature will not formally return to session until January, officials expect several bills to revise the tax framework and establish stricter permitting processes. At the local level, Bell County commissioners are reviewing their own tax abatement policies to increase oversight of these facilities.