Utah lawmakers are facing mounting pressure to increase transparency regarding the cost of data center tax incentives as reports from other states reveal massive, unexpected revenue losses. While the state continues to offer sales and use tax exemptions to attract technology giants, Utah remains among a group of states that does not disclose the specific dollar amounts lost to these tax abatements.
National Transparency Crisis
The debate over data center incentives has intensified across the United States, driven by the rapid rise of hyperscale facilities designed for artificial intelligence and cryptocurrency. According to Good Jobs First, these facilities are becoming a significant budget headache for state and local governments because existing tax-abatement laws were written for much smaller operations and did not anticipate the massive scale of modern AI-driven facilities.
Utah's Disclosure Status
A study by Good Jobs First identified Utah as one of 14 states that fails to disclose tax abatement revenue losses from data centers in their Annual Comprehensive Financial Reports. This lack of disclosure stands in contrast to states like Texas and Virginia, which correctly report these losses. Other states, such as Arizona, Florida, and Georgia, disclose these figures through Tax Expenditure Reports rather than primary financial audits.
Rising Costs in Ohio
The financial implications of these incentives are becoming clearer in neighboring regions, highlighting the risks of inaccurate forecasting. In Ohio, the state sales tax exemption for data centers cost approximately $555 million in 2024, which was four times higher than the state Department of Taxation had forecasted. By 2025, that cost surged to $1.6 billion, eleven times the original estimate of $136 million, according to data from the Ohio Department of Taxation.
Forecasting Difficulties
Ohio officials noted that the massive growth in the data center industry has hampered their ability to provide accurate historical estimates. A spokesperson for the Ohio Department of Taxation, Andrea Lannom, stated that the department could not share specific data prior to 2024 due to taxpayer confidentiality, noting that the industry has seen significant growth since the publication of the state's Tax Expenditure Report in November 2024.
Indiana Discloses Losses
The scale of these incentives has prompted legislative action in other states to demand more accountability. In Indiana, following pressure from watchdog groups and investigative reporting by WTHR-TV, the state recently disclosed that taxpayers are losing over $655 million through these exemptions. A significant portion of that loss—$611 million combined for 2024 and 2025—is attributed to a single corporate entity, Amazon.
Demands for Accountability
The Indiana disclosure revealed that while the state posts tax abatement agreements online, it previously failed to report the actual revenue lost. This transparency gap prompted calls for all states to report company-specific and project-specific data, as well as local revenue losses, to prevent massive public subsidies from remaining hidden from the public.
Utah Tax Framework Overview
In Utah, the tax structure for these entities is governed by complex statutes. Under Utah Code Title 59, Chapter 12, the state manages the Sales and Use Tax Act, which includes various exemptions and rules regarding how taxes are collected and reported. The Utah State Tax Commission oversees these regulations, including the requirements for businesses to maintain a sales tax license and the definitions of 'nexus'—the physical or economic presence that requires a business to collect tax.
