US taxpayers being kept in the dark over datacenter subsidies
(2025/11/11)
- Reference: 1762869930
- News link: https://www.theregister.co.uk/2025/11/11/us_taxpayers_dc_subsidies/
- Source link:
The US datacenter industry is reaping huge benefits from state-level subsidies, but transparency around these incentives is limited and states that do calculate their returns find they are losing money on the deals.
Hundreds of billions is being lavished on datacenter construction across the country, however, a report published today claims many of these projects are being funded at the expense of taxpayers, with few states confirming the names of the beneficiaries.
[1]Cloudy Data, Costly Deals: How Poorly States Disclose Data Center Subsidies is published by Good Jobs First, a non-profit body focused on corporate and government accountability. It points to 36 states where economic development subsidies for server farm projects mean that building materials and IT equipment are exempt from sales and use taxes.
[2]
The report claims only 11 states actually disclose which companies are receiving subsidies, and even then the disclosure is typically just the name of a Limited Liability Company (LLC) set up to develop the project, concealing which parent tech corporation is ultimately benefiting.
[3]
[4]
Those 11 states include Arizona, Connecticut, Illinois, Indiana, Minnesota, Nevada, Ohio, Pennsylvania, Texas, Washington, and Wisconsin.
Only five of these reveal estimated or actual subsidy amounts, and no state confirms how many jobs the datacenter owner promised to create, or how many actually materialized. The latter means the public cannot see if the subsidies were worth the tax breaks, despite job creation often being used to justify them, the report states.
[5]
Taxpayers are typically coughing up at least $1 million for each permanent datacenter job created, according to the figures.
Good Jobs First claims the states that calculated their return on investment found they are losing between 52 and 70 cents for every dollar of datacenter tax exemption. It questions whether this is defensible given [6]federal austerity measures that will significantly impact administrative budgets, and says states need to seriously consider ending or reducing these tax breaks.
In addition, the pace of datacenter construction is outpacing the ability of regional energy grids to supply enough juice, as a consequence of which Americans could face a [7]70 percent hike in their electricity bills by 2030 unless action is taken.
[8]
The report singles out a handful of states for being opaque on where the funding is going. Virginia, the " [9]datacenter capital of the world ," loses nearly $1 billion in tax revenue, but does not list which companies benefit or by how much.
In Louisiana, social media giant Meta is building the [10]largest datacenter complex in the world , but the public is being kept in the dark about what tax breaks the megacorp is receiving.
These gaps demonstrate double standards in transparency practices, according to Good Jobs First. Other types of project that are eligible for state subsidies are typically subject to higher levels of disclosure than datacenters, and there's no reasonable justification for the secrecy, it adds.
[11]Critical federal cybersecurity funding set to resume as government shutdown draws to a close - for now
[12]EU funds are flowing into spyware companies, and politicians are demanding answers
[13]FCC plans to kill Wi-Fi on school buses, hotspots for library patrons
[14]Fried chips: UK's nascent semi industry risks faltering
However, some states do earn modest praise from the report's authors. Indiana was highlighted because it publishes PDF copies of its contracts with individual companies and lists other state subsidies that a project was approved for. Nevada discloses promised jobs, wages, and subsidies. It also publishes some outcomes from older bit barn projects, but this data only becomes available years after the initial approval.
The report recommends states eliminate subsidies for datacenter projects, or at least reform their tax exemption policies. There seems little chance of that while they are competing to attract companies in what is being regarded as a [15]bit barn building boom period :
Good Jobs First claims the state legislature in both Georgia and Ohio already voted to sunset tax exemptions, but these moves were vetoed by the state governors.
At the very least, states should practice full transparency, detailing which companies are getting subsidies, how much, and in exchange for what benefits, it says. These disclosures should be easy to access and understand for any member of the public. ®
Get our [16]Tech Resources
[1] https://goodjobsfirst.org/cloudy-data-costly-deals-how-poorly-states-disclose-data-center-subsidies/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aRNrpe8BfUWXkmjapjX7EAAAAUQ&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[6] https://www.bloomberg.com/news/newsletters/2025-05-07/trump-s-and-musk-s-spending-cuts-would-slice-into-cities-and-states
[7] https://www.theregister.com/2024/11/22/ai_hike_energy_bills/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aRNrpe8BfUWXkmjapjX7EAAAAUQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2024/08/15/hyperscale_capacity_global_research/
[10] https://www.theregister.com/2024/12/05/meta_largestever_datacenter/
[11] https://www.theregister.com/2025/11/10/federal_cybersecurity_funding_set_to_resume/
[12] https://www.theregister.com/2025/10/02/eu_spyware_funding/
[13] https://www.theregister.com/2025/09/05/fcc_to_kill_wifi_school_buses/
[14] https://www.theregister.com/2025/08/20/uk_risks_faltering_in_global_semiconductors/
[15] https://www.theregister.com/2025/08/14/datacenter_investment/
[16] https://whitepapers.theregister.com/
Hundreds of billions is being lavished on datacenter construction across the country, however, a report published today claims many of these projects are being funded at the expense of taxpayers, with few states confirming the names of the beneficiaries.
[1]Cloudy Data, Costly Deals: How Poorly States Disclose Data Center Subsidies is published by Good Jobs First, a non-profit body focused on corporate and government accountability. It points to 36 states where economic development subsidies for server farm projects mean that building materials and IT equipment are exempt from sales and use taxes.
[2]
The report claims only 11 states actually disclose which companies are receiving subsidies, and even then the disclosure is typically just the name of a Limited Liability Company (LLC) set up to develop the project, concealing which parent tech corporation is ultimately benefiting.
[3]
[4]
Those 11 states include Arizona, Connecticut, Illinois, Indiana, Minnesota, Nevada, Ohio, Pennsylvania, Texas, Washington, and Wisconsin.
Only five of these reveal estimated or actual subsidy amounts, and no state confirms how many jobs the datacenter owner promised to create, or how many actually materialized. The latter means the public cannot see if the subsidies were worth the tax breaks, despite job creation often being used to justify them, the report states.
[5]
Taxpayers are typically coughing up at least $1 million for each permanent datacenter job created, according to the figures.
Good Jobs First claims the states that calculated their return on investment found they are losing between 52 and 70 cents for every dollar of datacenter tax exemption. It questions whether this is defensible given [6]federal austerity measures that will significantly impact administrative budgets, and says states need to seriously consider ending or reducing these tax breaks.
In addition, the pace of datacenter construction is outpacing the ability of regional energy grids to supply enough juice, as a consequence of which Americans could face a [7]70 percent hike in their electricity bills by 2030 unless action is taken.
[8]
The report singles out a handful of states for being opaque on where the funding is going. Virginia, the " [9]datacenter capital of the world ," loses nearly $1 billion in tax revenue, but does not list which companies benefit or by how much.
In Louisiana, social media giant Meta is building the [10]largest datacenter complex in the world , but the public is being kept in the dark about what tax breaks the megacorp is receiving.
These gaps demonstrate double standards in transparency practices, according to Good Jobs First. Other types of project that are eligible for state subsidies are typically subject to higher levels of disclosure than datacenters, and there's no reasonable justification for the secrecy, it adds.
[11]Critical federal cybersecurity funding set to resume as government shutdown draws to a close - for now
[12]EU funds are flowing into spyware companies, and politicians are demanding answers
[13]FCC plans to kill Wi-Fi on school buses, hotspots for library patrons
[14]Fried chips: UK's nascent semi industry risks faltering
However, some states do earn modest praise from the report's authors. Indiana was highlighted because it publishes PDF copies of its contracts with individual companies and lists other state subsidies that a project was approved for. Nevada discloses promised jobs, wages, and subsidies. It also publishes some outcomes from older bit barn projects, but this data only becomes available years after the initial approval.
The report recommends states eliminate subsidies for datacenter projects, or at least reform their tax exemption policies. There seems little chance of that while they are competing to attract companies in what is being regarded as a [15]bit barn building boom period :
Good Jobs First claims the state legislature in both Georgia and Ohio already voted to sunset tax exemptions, but these moves were vetoed by the state governors.
At the very least, states should practice full transparency, detailing which companies are getting subsidies, how much, and in exchange for what benefits, it says. These disclosures should be easy to access and understand for any member of the public. ®
Get our [16]Tech Resources
[1] https://goodjobsfirst.org/cloudy-data-costly-deals-how-poorly-states-disclose-data-center-subsidies/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aRNrpe8BfUWXkmjapjX7EAAAAUQ&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aRNrpe8BfUWXkmjapjX7EAAAAUQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aRNrpe8BfUWXkmjapjX7EAAAAUQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aRNrpe8BfUWXkmjapjX7EAAAAUQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.bloomberg.com/news/newsletters/2025-05-07/trump-s-and-musk-s-spending-cuts-would-slice-into-cities-and-states
[7] https://www.theregister.com/2024/11/22/ai_hike_energy_bills/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aRNrpe8BfUWXkmjapjX7EAAAAUQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2024/08/15/hyperscale_capacity_global_research/
[10] https://www.theregister.com/2024/12/05/meta_largestever_datacenter/
[11] https://www.theregister.com/2025/11/10/federal_cybersecurity_funding_set_to_resume/
[12] https://www.theregister.com/2025/10/02/eu_spyware_funding/
[13] https://www.theregister.com/2025/09/05/fcc_to_kill_wifi_school_buses/
[14] https://www.theregister.com/2025/08/20/uk_risks_faltering_in_global_semiconductors/
[15] https://www.theregister.com/2025/08/14/datacenter_investment/
[16] https://whitepapers.theregister.com/
Doctor Syntax
"Kept in the dark" literally, if they're unlucky.
Dark?
Snake
There's no "dark" about it, except in denial. This is EXACTLY what they vote for: corporatism subsidies for me, poverty wages and social closures for thee.
They just continue thinking that they are part of that beneficial "me" contingent.
Re: Dark?
Dan 55
They're also paying ICE for performative cruelty.
And this is surprising because?
retiredFool
Seriously, the government never learns. Can we say Foxconn, or Fox Con? Be it a football stadium that gets voted on by the taxpayers or these hidden deals, it always gets approved. It is never a good deal.
Which "AI" companies are benefitting?
Aladdin Sane
Yes.
I think if if was an American state taxpayer I'd be asking them to give a subsidy for datacentres not to be built in my state.
Brings very few permanent jobs, massive building disruption, uses crazy amounts of water and drives up the price of electricity in the region.
No doubt the states and communities get some form of land use tax but very unlikely to make up for the subsidy in the short-medium term.