U.S. Sen. Bernie Moreno, R-Ohio, said he plans to introduce federal legislation that would impose a 100% tax on any state or local tax incentive given to a data center.

The proposal, announced at the Ohio Energy Affordability Summit in Columbus on Sept. 4, would not block states or cities from offering incentives. It would erase the savings by taxing data center companies for the full amount at the federal level.

For New Albany, the stakes are direct. The city hosts close to 40 data center facilities, according to its data center website. Data center projects generated roughly $10 million in community development charge revenue in tax year 2024, according to the city's data center finance page. A single hyperscaler investment produced revenue equivalent to $178 million in payroll at the city's 2% income tax rate that same year. That revenue helped New Albany earn AAA bond ratings from both Moody's and S&P.

New Albany's local incentive structure relies on real property tax abatements, not the state-level sales tax exemptions at the center of Moreno's criticism. The city grants abatements for 10, 15 or up to 30 years for state-designated mega-projects, paired with minimum annual service payments that guarantee revenue through income tax, TIF payments and community authority charges.

Whether Moreno's bill would reach those local abatements is unclear. The legislation has not been formally introduced, and no bill text, committee assignment or introduction date is available.

At the state level, the numbers are large. Ohio committed at least $2.3 billion in sales tax exemptions for data centers, according to documents obtained by Signal Ohio. Google, Meta and Amazon each received exemptions worth $600 million over 40 years, with the last contract not expiring until 2058. Those deals were negotiated under former Gov. John Kasich between 2014 and 2018.

The exemptions cost Ohio more than $1.5 billion in lost revenue in 2025, nearly 12 times the state's $136 million forecast, the Ohio Capital Journal reported. Gov. Mike DeWine paused consideration of new data center tax breaks in May.

"No. 1, no taxes. I don't want a single taxpayer dollar going to support a data center. Period," Moreno said at the summit, according to the Ohio Capital Journal.

Moreno acknowledged there is "no way to get back" the $2.3 billion already committed, attributing the original deals to Kasich. He said he has urged companies to voluntarily stop accepting incentives.

In March, Moreno wrote to the Ohio Tax Credit Authority criticizing a $4.5 million state sales tax break for Ark Data Centers' $136 million expansion in Akron and Independence, a project expected to create 10 full-time jobs.

Moreno carved out an exception for Intel's semiconductor campus near New Albany. He said the federal government's 10% equity stake in Intel stock makes that arrangement "a better approach than just a handout," according to the Columbus Dispatch. Intel's Ohio incentive package is worth more than $2.1 billion.

The National Republican Senatorial Committee warned in an Aug. 18 memo that data centers are dragging down Sen. Jon Husted's tight midterm race against former Sen. Sherrod Brown. Husted, who spoke briefly at the same summit, mentioned data centers only once before leaving without taking press questions. His office did not respond when asked whether he agreed with Moreno's proposal, the Ohio Capital Journal reported.

No public response to Moreno's proposal from New Albany city officials appeared in available records as of Sept. 8. Google, Meta and Amazon, each named as recipients of $600 million in state exemptions, also had not responded publicly.

Nearby communities are pushing back on data centers through other channels. Pataskala and Sunbury city councils approved ordinances in August to put hyperscale data center bans on November ballots.

No bill number or timeline for Moreno's legislation has been announced.