Politics
Senate Democrats question Meta’s tax claims for AI data-center expansion
Seven Senate Democrats are asking Meta CEO Mark Zuckerberg to explain whether the company is using a federal research tax credit to offset costs of building AI data centers. Meta says the facilities require extensive experimentation and qualify for the incentive; the lawmakers argue ordinary construction costs should not.
WASHINGTON — Seven Senate Democrats are pressing Meta to explain whether it is claiming federal research tax credits for its artificial-intelligence data-center buildout, arguing the incentive may be intended for research rather than routine business expenses.
In a letter dated Wednesday, Oct. 14, the senators asked CEO Mark Zuckerberg about the company’s use of the research and experimentation credit. The group was led by Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, and included six other Democrats on the tax-writing panel.
The lawmakers said they were responding to a report that Meta had reduced its tax liability by billions of dollars through the credit. They warned that applying the subsidy to AI data-center expansion could amount to a significant misuse of federal tax law and warrant further investigation.
“The federal research credit can be a useful and necessary tool to support our nation’s innovation economy and cutting-edge research,” the senators wrote. “Subsidizing your A.I. data center build is not close to meeting this standard.”
Meta spokesperson Andy Stone defended the company’s position, saying AI-focused data centers are unlike conventional facilities because their design and construction require extensive testing and experimentation. He said that kind of domestic investment fits the purpose of the tax incentives.
The dispute comes as the rapid expansion of data centers has become a contentious issue in the run-up to the midterm elections, with voters raising concerns about the facilities. Budget forecasters have also warned that tax breaks claimed for AI infrastructure are large enough to reduce federal tax receipts.
Congress has long supported tax incentives for corporate research and development, and Republicans expanded the provisions as part of their 2025 tax law. Sen. Peter Welch, a Vermont Democrat who signed the Meta letter, separately asked the IRS last week for information about how Meta and other large technology companies are using the credit.
The letter’s central question is whether costs tied to building AI computing infrastructure meet the legal standard for eligible research and experimentation. The senators said they want Meta to account for its claims; the company maintains that the technical work involved in designing AI data centers qualifies.