Texas data center tax breaks balloon to $3.3 billion

Дата публикации: 27-07-2026 17:28:25

Texas senators are questioning whether some of the country’s most profitable technology companies still need billions of dollars in state tax breaks after the cost of a data center incentive program surged to $3.3 billion in 2026.
Members of the Texas Senate Finance Committee on Monday also raised concerns about how closely the state monitors the 138 data centers now receiving sales tax exemptions on equipment and electricity.
When lawmakers approved the incentives about a decade ago, they estimated the program would save technology companies $15 million every two years. The exemptions have since ballooned as companies built more facilities to support cryptocurrency, artificial intelligence and increased activity across the digital world.
“Is it just check, check, check? We trust them? Go down the list, check, check, check and here you go? Here’s your certification for millions of dollars from the State of Texas? I don’t know,” said Texas Sen. Lois Kolkhorst, R-Brenham.
Only 10 facilities qualified for the program during the first six years after lawmakers approved the tax breaks. Construction accelerated following the COVID-19 pandemic, bringing the number of participating facilities to 138.
Brad Reynolds, chief revenue estimator for the Texas Comptroller’s Office, told lawmakers that the state has audited only 20 of those data centers.
Six of the 20 audited facilities were not in compliance with at least one program requirement. The problems involved either the size of the facility or whether the company had hired the 20 permanent employees required to receive the tax break.
“In fact, I was surprised given the value of the sales tax incentive that they wouldn’t manage to employ twenty people,” Reynolds said.
“Right. Exactly my point,” Texas Sen. Royce West, D-Dallas, replied.
Data centers house and cool the servers that allow Texans to stream video, search the internet and use mobile apps on their smartphones.
State lawmakers are expected to continue examining the benefits companies receive this fall and next year.
Data center industry groups argue that the industry should not be singled out or treated differently from other businesses. They contend that if large manufacturing companies qualify for similar tax breaks, data centers should receive them as well.
This story was originally reported for broadcast by NBC DFW. AI tools helped convert the story into a digital article, and an NBC DFW journalist edited it again before publication.

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