States rethink data center tax breaks. States that once used generous tax incentives to attract data centers are facing growing costs, reports The Wall Street Journal (paywall). Ohio’s sales tax exemption for tech company purchases of computer servers and other equipment grew to over $1.5 billion last year, more than 10 times the state’s original estimate. Gov. Mike DeWine (R) paused new applications for the sales tax break in May. Lawmakers in at least 10 other states including Illinois, New Jersey, and Washington are ending similar tax breaks, and dozens of other states’ lawmakers are considering legislation to end them.
Treasury welcomes revised global minimum tax return. The Treasury Department says the release of the revised GloBE Information Return by the OECD will help implement an international tax agreement that limits overlapping global minimum tax rules for US-headquartered companies, reports Tax Notes (paywall). Treasury said the changes should reduce duplicative reporting and protect certain tax incentives, including the US research and development tax credit.
New York City considers Hudson Yards tax break. New York City officials are considering a $92 million property tax break for a $2.7 billion Hudson Yards tower, Bloomberg reports (paywall). The city’s Economic Development Corporation is scheduled to vote on the measure tomorrow. Supporters say the project would turn a long-vacant lot into office space, generate jobs and tax revenue, and improve the surrounding public realm. Mayor Zohran Mamdani (D) has earlier said that generally, public subsidies are not needed to keep businesses competitive.
Senate Finance to consider IRS chief counsel nominee. The Senate Finance Committee will hold a hearing tomorrow on several nominations including James Gadwood, who is nominated to be chief counsel for the IRS and an assistant general counsel at the Treasury Department. The committee also will consider Andrew De Mello to serve a 15-year term as a judge on the US Tax Court.
Itemized: Fact of the Week. The tax system delivers about one-third of all federal spending on children. The child tax credit is the largest single program supporting families with children, providing $118 billion in benefits for children aged 18 and under in fiscal year 2024. The earned income tax credit provided another $59 billion to families with children. About 90 percent of families with children receive the CTC, while more than one-third receive the EITC, with almost all EITC benefits going to families in the bottom 40 percent of the income distribution.
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