(The Center Square) – Wisconsin is estimated to lose $1.5 billion in initial foregone state sales tax from four data center projects, according to a new Legislative Audit Bureau report.
In addition, the state will lose $369 million annually once construction on the projects are complete, according to the document obtained by Wisconsin Watch.
Wisconsin has a wide-ranging sales tax exemption for data centers that was created in the state’s 2023-25 budget.
A Legislative Audit Report from fall 2025 showed that $70 million in foregone sales tax had already been foregone, which far exceeded estimates from the time the exemption was initially passed.
The exemption applies to everything from property purchases to computer servers and energy systems at the site to electricity and cooling systems.
Wisconsin’s Department of Revenue estimated the value of the incentives would be $8.5 million for the full multi-year construction of a facility and $735,000 recurring afterward. The department attributed the estimates to the U.S. Chamber of Commerce estimates that a typical data center costs about $215.5 million to construct.
But many of the Wisconsin data centers are much more expensive than initial estimates with Microsoft alone announcing more than $20.6 billion in data centers in Wisconsin.
OpenAI, Oracle and Vantage Data Centers have announced more than $15 billion in data center investments in Port Washington. Epic Hosting is expected to spend $347 million in Verona. Meta has announced a $1 billion project in Beaver Dam.
In all, that means $36.9 billion in data centers are coming to the state from those four companies alone with the state forgoing an estimated $40 million in sales tax for every $1 billion in company investment.
“The announcements and planned investments from these four certified companies combine for a total investment of more than $36.9 billion, spread over the life of each project” currently planned to occur between 2024 and 2028, the report said. “It is estimated that an investment this size would result in $1.5 billion in initial foregone state sales tax revenue. Additional foregone state sales tax revenue of $369 million on an annual basis is estimated once these projects are completed.
“Expenditures eligible for the state tax exemption would also be exempt from local sales and use taxes, resulting in forgone county, city, and premier resort area tax collections, if applicable.”
Those totals have led Congressman Tom Tiffany, a Republican candidate for Wisconsin governor, to declare that he will end subsidies for data centers.
The sales tax exemptions are just one of the tax breaks for data centers with many of the projects also being placed in tax increment districts where they can keep the additional property taxes from their properties to cover money spent on things such as infrastructure at the data center site.
