As demand was picking up for data centers, Kentucky lawmakers created sales and use tax exemptions for some of the projects, hoping to lure builders to the commonwealth.
Take one of the initial supporters, Rep. Tommy Truett. In a recently posted video, the Republican said the deal sounded good for his community.
"At the time, I'm like, hey, if I can get somebody to come to Jackson County and spend $25 billion on a company (and) they're still paying the property taxes, they're still paying the utility taxes. The only break they get is a sales tax on the guts of the inside of the building. Makes sense to me," he says.
But fast forward to today — with backlash against hyperscale data centers on the rise and estimates from the left-leaning Kentucky Center for Economic Policy suggesting the state could lose as much as $2.2 billion in sales taxes during the construction of just four such facilities — and Truett acknowledges his views have shifted.
"I will say that now, obviously, I'm not for any type of tax breaks or tax incentives for these mega data centers," hinting that legislation reeling them back in is expected in 2027.
And those proposals to lessen or do away with the incentives could have momentum. The Lexington Herald-Leader reports Senate Majority Caucus Chair Robby Mills has said he "has a feeling" the tax breaks could be rescinded when lawmakers return in January.
Gov. Andy Beshear has already placed more restrictions on the projects through executive order, a rare move that put him in alignment with influential Republicans, who have been increasingly interested in setting guardrails for the data center projects.