Wyden Proposes Data Center Tax Hike as Moreno Bill Targets AI Subsidies
Sen. Ron Wyden unveiled a plan to impose a new excise tax on data center gross receipts and restrict their access to federal tax breaks, including depreciation and R&D credits. Simultaneously, Sen. Bernie Moreno introduced S. 5689, which would bar large AI-focused data centers from federal subsidies and penalize state incentives. These moves reflect growing political pressure to curb AI infrastructure costs and address voter backlash against data center expansion.
Key points
- Wyden’s proposal includes a new excise tax on data center services and limits on tax breaks for depreciation, R&D, Opportunity Zones, and real estate investment trusts.
- Wyden aims to pair the tax plan with expanded unemployment benefits to mitigate potential AI-driven job losses.
- Moreno’s S. 5689 targets data centers with at least 100 megawatts of power demand and 50% AI accelerator chips, prohibiting federal subsidies and imposing a 100% federal tax penalty on state incentives.
- The bills target major tech firms like Amazon, Microsoft, and Alphabet, which operate large-scale AI data centers.
- Wyden’s plan could advance if Democrats win the Senate in November, as he is set to lead the Finance Committee.
Background
Recent months have seen heightened scrutiny of AI infrastructure, including a dispute over Meta’s $6.6 billion in R&D tax credits and rapid advancements in data center deployment technologies like Nvidia’s DSX POD. These developments underscore the fiscal and environmental concerns driving legislative action.
How outlets are covering it
Wyden’s approach focuses on broad tax increases and benefit restrictions, while Moreno’s bill specifically targets AI-heavy facilities with strict subsidy bans. Both proposals reflect bipartisan concern over corporate subsidies but differ in scope and mechanism. Wyden emphasizes worker protection through unemployment benefits, whereas Moreno focuses on penalizing state-level incentives.
Why it matters
These proposals could reshape the financial landscape for AI infrastructure, affecting major tech companies and state governments. They also signal a potential shift in federal policy toward curbing corporate subsidies and addressing AI’s economic impact, with implications for job security and regional development.
What to watch
Wyden’s plan may gain traction if Democrats control the Senate post-November elections. Moreno’s bill requires Treasury and Commerce regulations within 12 months to take effect. Both proposals face potential opposition from tech industry stakeholders and state governments reliant on data center incentives.
- Wyden unveils plan to raise taxes on data centers Politico
- Wyden Data Center Tax Plan, Tariff Refunds in Salem Salem Business Journal
- Senator Bernie Moreno introduces S. 5689: Recapturing Excessive Corporate Largesse through Accountability and Incentive Measures Act Quiver Quantitative
- New Moreno Bill Targets Incentives For Data Centers With One-Hundred Percent Federal Tax - Senator Moreno U.S. Senate (.gov)
Want the full story? Read the original reporting
Read on Politico