Repeal New York's Outdated Data Center Tax Loophole

I urge you to support legislation repealing New York's outdated sales tax exemption for data centers. This 26-year-old law, enacted in 2000 during the dial-up era, is costing our state and local communities hundreds of millions of dollars while serving no legitimate public purpose. When Governor Pataki created this exemption for "internet data centers" in 2000, the state estimated it would cost $9 million annually. That projection was based on the modest data centers of the dial-up and early web era. Today's data centers dwarf their predecessors in size and equipment costs, yet they still claim the same blanket exemption. The scale is staggering. Lake Mariner Data Center in Niagara County alone is expanding with $3.2 billion in equipment purchases—all potentially exempt from sales tax. Another proposed project in Genesee County would provide a $1.4 billion tax exemption. Across New York, more than 30 major data center projects have been proposed, many serving AI giants like Google and Meta. This exemption strips tax revenue from the state and local governments that provide essential services—schools, roads, emergency services, and infrastructure—that New York families and businesses depend on. Meanwhile, working families and small businesses that do pay sales taxes shoulder more of the tax burden. Virginia has already lost $928 million in a single year to similar exemptions. How much is New York losing? The exemption was designed to attract young internet companies during the dot-com bubble. That rationale vanished decades ago. Today's data centers are massive, permanent installations operated by trillion-dollar tech corporations. They don't need special tax breaks to locate here—they need our infrastructure and power grid. Senators Liz Krueger and Assemblymember Chris Burdick have already introduced repeal legislation. I urge you to co-sponsor these bills and push for a vote this session. New York's communities deserve the tax revenue these corporations owe. This is not about punishing business—it's about ensuring that massive, profitable corporations pay their fair share like everyone else