Texas gave data centers more than $1 billion in tax breaks in 2025, data shows

HOUSTON, Texas (KTRK) -- The state of Texas gave data centers more than $1 billion in tax breaks in 2025, according to data from the Texas State Comptroller's Office.

The sales tax break has been in place for over a decade, but the total dollar amount for the tax breaks has increased recently.

"The exemption amount is going to be growing every year going forward. So, it's a billion dollars in '25, and it's going to reach almost $2 billion by 2030," Rice University Fellow in Finance, John Diamond, Ph.D., said. "You're looking at massive amounts of revenue. This could cover the entirety of the school funding program for the education savings allotments that were passed in the last legislature."

In recent years, data centers have popped up around the country, including in the state of Texas.

There are 239 operational data centers in Texas and over 100 planned projects, according to data from ABC News' data team using data from Data Center Map.

Data centers process, store, and manage large amounts of data.

The data centers must meet certain requirements to qualify for tax incentives, which include that the facility must be at least 100,000 square feet in Texas, consisting of a single building or portion of a building that has been, or will be, specifically constructed or refurbished to house servers and related equipment for processing, storing, or distributing data.

Qualifying data centers are not required to pay the state's 6.25% sales tax rate on purchases related to building and maintaining the facility, according to the state's Comptroller's office.

Texas is among the list of other states expected to rethink their tax breaks.