Texas will lose out on at least $3.1 billion in sales tax revenue over the next two years thanks to an exemption for the state’s booming data center industry, according to the comptroller’s office.
That figure is likely a vast underestimate given the explosion of new facilities being built, but already makes the tax break one of the state’s costliest incentive programs and soon to be the most expensive of its kind in the nation.
Lawmakers, who will meet in January for the next legislative session, say they are considering proposals to either limit the scope of the tax break or get rid of it altogether.
. . . Lawmakers approved the tax break more than a decade ago, when data centers were smaller and required fewer resources. From 2014 to 2022, the exemption amounted to between $5 million and $30 million in lost state revenue per year. By 2023, that skyrocketed to more than $150 million, and this year Texas is forgoing at least $1.3 billion — a number that is rapidly increasing every year, based on state projections.
From ChatGPT:
- What is a tax break? What types exist in Texas?
- What is the evidence that tax breaks actually create incentives for business development?
- What is the history of tax breaks in Texas?
- What are the most significant tax breaks given to businesses in Texas by the state and local governments?
- What is the Texas Economic Development Act?
- Provide a history of the Texas Economic Development Act.
