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Wisconsin data center tax break entered law through 2023 budget amendment
A sales-tax exemption for data center construction and electricity was added to Wisconsin’s 2023-25 budget, despite an identical bill never receiving a Senate hearing or vote. With costs now projected in the billions and public opposition rising, both major-party candidates for governor say they support ending it.
Wisconsin’s sales-tax exemption for data centers was added to the state budget in 2023 through a last-minute amendment, bypassing a separate bill that had passed the Assembly but stalled in the Senate.
The exemption was included in Motion 126, a 14-item amendment introduced June 22, 2023, by Republican co-chairs of the Legislature’s Joint Finance Committee, Sen. Howard Marklein and Rep. Mark Born. The committee approved it 12-6 along party lines. The Republican-controlled Legislature made few changes to the committee’s budget, and Democratic Gov. Tony Evers signed the two-year, $99 billion spending plan days later.
The provision exempts construction materials and electricity used by data centers certified by the Wisconsin Economic Development Corp. from state sales and use taxes. A separate bill, AB 302, had passed the Assembly 60-34 the day before the amendment was introduced. Its Senate counterpart had not received a public hearing, committee vote or floor vote.
The tax break drew an organized lobbying effort. State Ethics Commission records cited in the 2023 budget debate show 15 organizations, including utilities, Microsoft and the Wisconsin Technology Council, hired 59 lobbyists to support it. The lobbyists included former Republican Assembly speakers Jeff Fitzgerald and John Gard, as well as former Democratic Senate Leader Jennifer Shilling.
At the time, the state could not estimate the exemption’s cost. A March memo from the nonpartisan Legislative Fiscal Bureau later projected that if four data centers cost a combined $36.9 billion to build between 2024 and 2028, the state could forgo $1.5 billion in sales-tax revenue. The bureau also estimated that exempting electricity used by the centers could mean an additional $369 million in annual lost sales-tax revenue.
The projected costs have become an issue in the Nov. 3, 2026, election. Republican gubernatorial candidate Tom Tiffany has called for repealing the tax break, as has Democratic candidate David Crowley, Milwaukee County’s executive. At an Oct. 21 debate, Tiffany criticized Crowley for taking that position only recently.
Both candidates had previously expressed support for data center development. Tiffany backed a 2024 federal bill to speed permitting for the facilities and called the technology exciting. Crowley said in November 2025 that Wisconsin could become a data center hub for the country and the world.
Public opinion has also shifted. A Marquette University Law School poll found that 74% of respondents believed data centers’ costs outweighed their economic benefits, while 24% said the benefits outweighed the costs.
The debate centers on whether the jobs and investment promised by large technology companies justify the public revenue forgone through the exemption. The 2023 budget provision covers projects by major firms including Amazon, Microsoft, Google and Meta, as Wisconsin faces mounting questions about the fiscal and community impacts of large-scale data center development.