County Leaders Push New York to End Data Center Sales Tax Exemption
Onondaga County Executive Ryan McMahon, speaking for county executives statewide, asked Gov. Kathy Hochul to seek repeal of a 26-year-old sales tax exemption for internet data centers. He argued the break was written for an older industry and can deprive localities of revenue from large modern facilities. Hochul has said she supports eliminating the exemption, and McMahon wants the change included in her upcoming budget proposal.
McMahon leads the statewide county executives’ group, whose members voted unanimously against a blanket break for modern data centers. His letter, sent Tuesday, asks Hochul to put repeal in the budget she will propose early next year. Niagara County officials suspect the county is losing millions in revenue tied to the fast-growing Lake Mariner facility.
Onondaga County has hired Rochester-based CPL for a study costing up to $500,000, with public input and completion expected by mid-April 2027. In Lysander, Ranalli Super DC has sought a grid connection; town officials imposed a six-month moratorium that expires next month unless extended.
The push could shift more tax revenue toward local services, but it may also alter how data-center projects are negotiated and sited. Residents in host communities may gain more leverage over incentives and disclosure, while developers could face higher costs or slower approvals. County budgets and local planning capacity could be affected, especially where large facilities seek grid connections and exemptions.