Wisconsin data center tax break to cost state more than $2 billion

Wisconsin is poised to forgo more than $2 billion in sales tax revenue to subsidize hyperscale data centers built by trillion-dollar companies such as Microsoft and Meta.

Data centers were granted a sales tax exemption in the 2023-25 state budget, which was approved by the Republican-controlled Legislature and Democratic Gov. Tony Evers as a way to attract economic development to the state.

That means the $1 billion data center in Beaver Dam, a $20 billion complex in Mount Pleasant and a $15 billion facility in Port Washington don’t have to pay the 5% state sales tax, or local sales taxes, on purchases for constructing and equipping their facilities.

When the budget passed in July 2023, the scale of the data center boom was so uncertain that the nonpartisan Legislative Fiscal Bureau did not estimate how much state revenue would be “forgone” under the exemption, aside from a hypothetical example.

But now a fiscal bureau projection is in:

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RSK: That is a lot of money to forgo in sales tax. You can bet some new bill will evolve to recollect some of this.