NC Governor Stein Proposes Review of Data Center Tax Breaks Amid Revenue Concerns
Governor Josh Stein is urging the North Carolina Energy Policy Task Force to evaluate the state's data center sales tax exemption, which could result in significant revenue losses. With planned data centers, the state may face missing out on $1.5 to $2.3 billion in sales taxes during construction and about $450 million annually thereafter.
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Governor Josh Stein has requested the North Carolina Energy Policy Task Force to assess the potential overhaul or elimination of sales tax exemptions for data centers, which could cost the state hundreds of millions in revenue. Current data centers may be avoiding $45 to $57 million in sales taxes annually.
If planned data centers are developed, the state could lose $1.5 to $2.3 billion in construction-related sales taxes, and $450 million annually once operational. The state’s exemption is one of seven nationwide without an expiration date.
Arguments for maintaining the exemption include job creation and economic benefits, but concerns about rising energy costs and potential deficits loom. Any legislative changes would require approval from the N.C. General Assembly.
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