Texas will forgo at least $3.1 billion in sales tax revenue over the next two years from its data center tax exemption, according to the state comptroller's office — and the real figure is likely higher given the pace of new construction. The exemption cost $5–30 million per year from 2014 to 2022. By 2023 it hit $150 million. This year: $1.3 billion and climbing.
State Sen. Joan Huffman, chair of the Senate Finance Committee, told the Texas Tribune the numbers are "extremely concerning" and "unsustainable," and plans to introduce legislation to repeal or limit the break. The annual cost now exceeds the state's new school voucher program and is rapidly outpacing the controversial Chapter 313 tax abatement program.
Despite the massive tax expenditure, data center employment remains thin — the industry argues indirect economic effects justify the breaks, but the scale of foregone revenue relative to permanent jobs created is increasingly difficult to defend.