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Kentucky's data center tax incentives might get a second look, but don't expect a repeal: Senate President

Kentucky currently has more than two dozen operating data centers and many more data center-related projects under consideration, according to the Kentucky Association of Counties.
KNC/Adobe Stock
Kentucky currently has more than two dozen operating data centers and many more data center-related projects under consideration, according to the Kentucky Association of Counties.

Leading Kentucky lawmakers have signaled they might reconsider data center tax incentives the General Assembly passed in 2025. But the changes may fall short of a repeal.

As cities and communities across Kentucky grapple with public backlash against the speedy build-out of data centers, with many passing bans, moratoriums, or stricter regulations, the state continues to offer incentives to companies looking to build the controversial developments in the commonwealth.

Critics have argued the incentives are unnecessary, citing the massive resources the tech companies already wield. A Kentucky Center for Economic Policy report also suggested the incentives, which have yet to be utilized, could cost the state more than $2 billion in revenue if companies decide to apply for them.

That's led to suggestions that GOP lawmakers in Frankfurt might take a second look at the tax breaks.

But Senate President Robert Stivers told WUKY that doesn't mean there's an appetite to scrap them entirely.

"People are saying these are very lucrative incentives. Actually, it's the most narrow set of incentive packages we have," he said. "Everything still stays as it would on any normal business, except for a sales tax on the chips."

As for what kind of tinkering the legislature might do with the incentives, Stivers stopped short of offering details about any changes.

"There' are several we're talking about and clarifying some tax language," the Manchester Republican leader said.

One possibility: State Senator Robby Mills hinted in August that lawmakers might shorten the time span of the tax breaks.