COLUMBUS, Ohio (WOWO) — Ohio Republican U.S. Sen. Bernie Moreno says he plans to introduce federal legislation aimed at eliminating the financial benefit of state and local tax incentives for data centers.

Speaking at an energy affordability summit in Columbus, Moreno said states and technology companies should stop relying on taxpayer-funded incentives for data center projects. If they don’t, he said, the federal government should intervene.

Moreno proposed imposing a federal tax equal to 100% of any tax incentive provided to a data center by a state or local government according to WTOL.

“I don’t want a single taxpayer dollar going to support a data center. Period,” Moreno said.

Under the concept Moreno described, states and local governments would still technically be able to offer tax incentives. The proposed federal tax, however, would effectively cancel out the value of those incentives for the companies receiving them.

Moreno has not yet introduced the legislation, so details about how the proposal would be structured and enforced remain unclear.

The proposal comes as data center development has become a contentious issue in Ohio and other states. Supporters have argued that the facilities are important to expanding artificial intelligence infrastructure and maintaining U.S. competitiveness, while critics have raised concerns about electricity demand, water use, environmental effects and the cost of infrastructure.

Ohio has provided substantial tax incentives to data center projects.

According to state data reported by Signal Ohio, the state has committed at least $2.3 billion in sales-tax exemptions for data centers. Google, Meta and Amazon each have agreements valued at roughly $600 million over 40 years, although state officials have said the eventual cost could be significantly higher.

Ohio law also provides tax exemptions for certain computer data center equipment and investments under a program that took effect in 2025.

Moreno said the existing incentives have become difficult to justify at a time when many taxpayers are dealing with higher household expenses.

“That’s bullshit,” Moreno said when discussing the idea of taxpayers subsidizing major technology companies.

He said companies receiving the incentives could voluntarily stop accepting them, states could stop offering them, or Congress could take action.

“Stop taking tax money,” Moreno said.

Moreno’s proposal is also emerging amid growing debate over the effect of large data centers on electricity prices.

The facilities can require enormous amounts of electricity to operate, particularly as companies expand their artificial intelligence capabilities. Concerns have grown over whether the costs of expanding power infrastructure could ultimately be passed along to households and small businesses.

Moreno has previously criticized individual data center tax breaks.

In March, he criticized a $4.5 million Ohio tax incentive connected to a data center expansion backed by the Carlyle Group, arguing that the project was expected to create only 10 new jobs while potentially increasing pressure on the state’s electric grid.

Ohio officials have also taken steps to reassess data center incentives.

Gov. Mike DeWine paused new data center incentives earlier this year after reporting indicated that the cost of existing incentives in 2025 was substantially higher than previously projected.

Moreno’s comments came during a broader discussion about energy affordability in Ohio.

Republican U.S. Sen. Jon Husted, who also spoke at the Columbus summit, has focused on protecting electricity customers from costs associated with new large-scale power users.

Husted introduced the Ratepayer Protection Act in July. The legislation would require states to consider standards for connecting large electricity users, including data centers, to the electric grid.

Husted has said the goal is to prevent families and small businesses from being forced to pay for energy infrastructure needed to support new data centers while allowing the United States to continue building infrastructure for artificial intelligence.

Husted’s office did not say whether the senator supports Moreno’s proposal to impose a federal tax on state and local data center incentives.

Moreno said he believes the public has not been given a convincing explanation of why communities should provide taxpayer support for the facilities.

“These data centers are going to come into our community and take our water and pollute our environment,” Moreno said. “They’re going to raise our electricity prices. They’re eventually going to put us out of work — and our taxpayer dollars are going to support the construction of these things.”

“It’s the worst sales pitch in the history of sales pitches,” he said.

The debate comes as Ohio and other states weigh how to balance the economic and technological benefits of data center development against concerns about infrastructure costs and community impacts.

For now, Moreno’s proposed federal legislation has not been formally introduced, meaning Congress has yet to consider specific legislative language or vote on the proposal.