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Texas lawmakers are considering cutting a costly, decade-old tax break for the state’s booming data center industry.
The overview: Texas spends more than $1 billion annually on the sales tax exemption, and the comptroller’s office estimated in 2025 that due to the program, the state will lose about $3.2 billion in sales tax revenue over the next two years.
The Lone Star State is home to the nation’s fastest-growing data center market, and the Data Center Coalition, which advocates for the industry, has argued that the tax break program is key to maintaining that title. Senators and members of the public who spoke at a July 27 hearing disagreed.
Looking ahead: Amid a bipartisan push for more regulation of data centers, senators indicated that they intend to add more strings to the tax exemption program or eliminate it entirely.
"The question is whether or not we need to have a special session where all of us are focusing in on this," Sen. Royce West, D-Dallas, said.
“We do,” Sen. Lois Kolkhorst, R-Brenham, replied.
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