Report: Over a Quarter of US States Fail to Disclose Data Center Tax Abatement Costs
April 17, 2026
A new report from the advocacy and research group Good Jobs First has revealed significant gaps in the financial transparency of U.S. states regarding lucrative tax incentives offered to the data center industry. The findings highlight a critical issue as states compete fiercely to attract capital-intensive digital infrastructure projects, often using substantial tax breaks as a primary lure.
The report identifies 14 states—Alabama, Arkansas, Idaho, Iowa, Indiana, Louisiana, Maryland, Missouri, Mississippi, North Carolina, North Dakota, Oklahoma, South Carolina, and Utah—that do not properly disclose the public revenue lost to data center tax abatements. According to Good Jobs First, this practice violates the Generally Accepted Accounting Principles (GAAP), the standard accounting framework used by all state and most local governments. GAAP standards are set by the private Governmental Accounting Standards Board (GASB) and adherence to them is crucial for governments to secure favorable credit ratings and lower borrowing costs.
The core of the dispute centers on the definition of a tax abatement. The report argues that the incentives provided to data center developers meet GASB's criteria, specifically outlined in GASB Statement 77. The statement defines a tax abatement as "resulting from an agreement between a government and an individual or entity in which the government promises to forgo tax revenues and the individual or entity promises to subsequently take a specific action that contributes to economic development or otherwise benefits the government or its citizens." The non-disclosing states, therefore, are failing to report these forgone revenues as required.
The scale of potential revenue loss is immense. For context, states that do disclose such figures, including major data center hubs like Georgia, Virginia, and Texas, have each reported annual tax revenue losses exceeding $1 billion due to these abatements. Tax abatements remain a common, though increasingly contentious, tool for states and localities seeking to attract data center investment. Critics argue that governments often forgo more revenue than necessary, subsidizing wealthy hyperscalers and investment-backed developers instead of ensuring they pay their "fair share."
The lack of transparency in nearly 30% of states has broader implications for public accountability and fiscal policy. Without a clear picture of the costs, policymakers and citizens cannot effectively evaluate whether the promised economic benefits of data center projects—such as job creation and indirect economic activity—justify the substantial public subsidies. This report adds fuel to the ongoing national debate balancing aggressive economic development incentives with responsible fiscal stewardship and community impact.
Source: datacenterdynamics
