Kentucky Governor calls for repeal of data center tax incentives

Kentucky Governor Andy Beshear has called for the repeal of state tax incentives designed to attract hyperscale AI data centers, arguing that the wealthy companies involved do not require financial assistance from the state.

This call follows bipartisan criticism and a report from the Kentucky Center for Economic Policy, which suggested the state could lose over $2 billion in sales tax revenue if four proposed data centers are constructed. While statewide incentives were expanded to all 120 counties in 2025, some other states, including Ohio and Illinois, have already paused similar programs.

Conversely, a study by Commonwealth Economics Partners, commissioned by NetChoice, suggests these facilities could provide significant fiscal benefits. The report modeled a hypothetical $4 billion, 400-megawatt data center and estimated it could generate between $290 million and $435 million in local tax revenue over 12 years. The study also projected the creation of approximately 200 permanent jobs with an average annual wage of $105,000, alongside thousands of construction jobs.