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- calendar_today October 26, 2026
The Emergence of Wisconsin’s Data Center Tax Exemption
On June 22, 2023, the final amendment to Wisconsin’s two-year, $99-billion state budget was anxiously anticipated by legislators and lobbyists at the Capitol. The amendment, known as Motion 126, was introduced by Republican leaders Sen. Howard Marklein and Rep. Mark Born, co-chairs of the Joint Finance Committee, after extensive discussions with legislative power brokers.
The Path to Passage: Legislative Maneuvering
Motion 126 included a six-page, 14-item summary of spending recommendations. While it allocated funds for private schools, investment programs, and health care, Item 12 proved to be a significant policy change. It granted an exemption from sales and use taxes for the construction and operation of data centers certified by the Wisconsin Economic Development Corp., as well as for the electricity used by these centers. The Joint Finance Committee’s vote followed party lines, with all 12 Republicans voting yes and all 6 Democrats voting no.
Background Legislation and Lobbying
Prior to this amendment, a bill (AB 302) focused on enacting a sales tax exemption for data centers had passed the Assembly 60-34, sponsored by 12 Republicans, including Finance Committee member Shannon Zimmerman. However, an identical bill was pending in the Senate without a hearing or vote, which would have typically stopped the legislation from becoming law. The Finance Committee's amendment ensured the exemption was included in the final budget passed by the Republican-controlled Legislature and signed by Democratic Governor Tony Evers.
Intense lobbying accompanied these efforts. Records from the Ethics Commission show 15 organizations—including major utilities, Microsoft, and the Wisconsin Technology Council—employed 59 lobbyists to advocate for the exemption. Among them were two former Republican Assembly speakers, Jeff Fitzgerald and John Gard, as well as former Senate Democratic Leader Jennifer Shilling.
Uncertain Fiscal Impact and Growing Concerns
At the time of passage, the budget summary itself stated, “The estimated amount of foregone sales tax revenue as a result of this provision is unknown.” However, more recent estimates have brought the issue to the forefront. In March, the Legislative Fiscal Bureau projected that, if four data centers worth $36.9 billion were constructed between 2024 and 2028, Wisconsin could forgo $1.5 billion in sales taxes. Annual revenue loss could add up to an additional $369 million due to electricity sales tax exemptions.
Political Fallout: Controversy in the Governor’s Race
The tax break has emerged as a significant tax break controversy in the 2026 governor’s election. Candidates from both parties, Republican Congressman Tom Tiffany and Democratic Milwaukee County Executive David Crowley, now call for repealing the data center sales tax exemption. Tiffany points out Crowley’s recent position change, referencing their debate on October 21.
Columnist Dave Cieslewicz highlighted both candidates’ past support for data centers: Tiffany supported federal measures to speed up permitting in December 2025, calling centers “an exciting new technology,” while Crowley previously promoted Wisconsin as a potential “data center hub.”
Public Opinion and Future Considerations
Public opposition to the tax exemption appears significant. A Marquette University Law School poll indicates 74% of respondents believe the cost of building data centers outweighs their economic benefits, while 24% disagree. This growing public opposition to data centers and the mounting projected state revenue loss are fueling bipartisan discussion about repealing the exemption.
The method of including the exemption—via a legislative budget amendment—reflects a familiar tactic in Wisconsin politics. While not the first instance of major policy changes embedded in last-minute amendments, it remains a notable example of legislative strategy.
Source: isthmus.com.
