House Bill 1223, passed in 2013, allowed data centers to get tax breaks across the state.
In 2013, the estimated sales tax exemption for qualifying data centers was nearly $15 million for 2014 to 2015.
However, with the new and dramatic growth across the state, Texas is estimated to give up $3.3 billion in tax revenue over the next two to three years for qualified data centers.
The Texas Comptroller's office gave an update about new growth. Leader said their last estimate in fall 2024, for the large qualified data centers exemption, assumed only 12 new data centers would be built here in a 6-year period.
The office said they did not foresee the 23 that came in last year or the 59 data centers that came in this year.
Those with the data center coalition spoke about the growth they contribute to the state.
"Data centers are not simply buildings; they're long-term investments in Texas. Communities that create jobs, strengthen workforce development, support education, expand economic opportunity for Texans. They support a broad ecosystem of electricians, pipefitters, HVAC technicians, manufacturers, suppliers, and small businesses throughout the state," Dan Diorio with the Data Center Coalition said. "These are long-term investments that provide meaningful benefits to the Texas localities where they operate by creating high-quality jobs, generating critical tax revenue, supporting workforce development, and contributing to local economic growth. According to the latest PWC Economic Impact Study, the data center industry contributed $65.8 billion to Texas GDP in 2024."
Meanwhile, Texas Agriculture Commissioner Sid Miller held a rally outside the Capitol in Austin, urging Gov. Greg Abbott to press pause on the hyperscale data center growth.
"I have called on the governor. People of all across our state are calling on the governor to call a special session to deal with these data centers. Prior to that, I called on him to do a one-year moratorium. Which would allow our legislature to meet during regular session, hammer all this out, and have new laws in place and regulation and oversight," Miller said.
Gov. Abbott has touted his new reversal on the data centers and new restrictions, after just last week he announced an East Texas data center project ended after they fell short of those new standards announced last month.