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<\/p>\nShould Hochul enact a ban on property, sales and mortgage tax breaks in next year’s budget, New York would join a growing list of states restricting data centers from receiving lucrative abatements.<\/p>\n
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Hochul addresses local officials at a roundtable event in Kenmore on July 20, 2026. Photo by J. Dale Shoemaker.<\/p>\n
Governor Kathy Hochul on Monday said wants to see a ban on tax breaks for large data centers in New York, including those issued by local industrial development agencies.<\/p>\n
The governor proposed last week \u201can end to all tax subsidies for data centers,\u201d referring specifically to a 2000 law that authorized state and local sales tax breaks for all \u201cinternet data centers.\u201d<\/p>\n
On Monday, Investigative Post asked Hochul whether her proposed ban also applied to IDAs, which have been subsidizing data centers at the local level for years.\u00a0<\/p>\n
Hochul\u2019s answer: Yes.<\/p>\n
The governor said she doesn\u2019t \u201cwant to tie the hands of the local IDAs\u201d but that she supports \u201ca narrow exclusion\u201d that blocks the 106 IDAs from issuing property, sales and mortgage tax breaks to so-called hyperscale data centers. New York defines hyperscale data centers as those requiring 50 megawatts of electricity or more to run. That amount of electricity could power 25,000 to 50,000 homes.<\/p>\n
Hochul said a ban on subsidies for data centers could come in next year\u2019s state budget and that she plans to work with lawmakers in the coming months.<\/p>\n Should such a measure become law before her one-year moratorium on data centers is up, it could block subsidies for the proposed Stream US Data Center project in Genesee County and the proposed Riverview Innovation & Technology Campus in the Town of Tonawanda. Stream has requested $1.46 billion in tax breaks from the Genesee County IDA. The Riverview project has not yet requested subsidies, but Erie County Executive Mark Poloncarz has said previously that he would not support the county IDA awarding tax breaks to the project.<\/p>\n The measure could also prevent a third proposed data center<\/a> in Chautauqua County from seeking tax breaks.<\/p>\n \u201cI would say I would limit this [restriction] to the AI data centers, the hyperscalers,\u201d Hochul said Monday. \u201cThat would be my recommendation.\u201d<\/p>\n That would mean no state and local sales tax breaks, no property tax abatements and no reduction of the mortgage recording tax.<\/p>\n \u201cThere should not be any tax breaks. These are very successful, very profitable companies. New York is very attractive. They will still come without getting $1 million per temporary job,\u201d the governor said. \u201cThat\u2019s just not right.\u201d<\/p>\n \u201cThey want something that we have. We should be able to have more leverage over that process instead of [it being] automatic.\u201d<\/p>\n Hochul\u2019s comments came during a roundtable discussion on the executive order she signed last week that places a ban on state permits for new data centers for the next year. She was joined by Deputy County Executive Lisa Chimera, state Sen. Jeremy Zellner, state Assembly members Crystal Peoples-Stokes and Bill Conrad, mayors from several towns home to data centers, and several local residents.<\/p>\n To date, tax breaks issued to two local data centers \u2014 the H5 Data Centers facility in Lockport (formerly Yahoo!) and TeraWulf\u2019s Lake Mariner installation in Barker \u2014 have cost Niagara County millions in potential tax revenues. The Yahoo! project received some $478 million<\/a> in property and sales tax breaks, plus low-cost hydropower from the New York Power Authority. The TeraWulf facility, meanwhile, is not paying state or local sales tax on multi-billion dollar expansion. It also receives low-cost hydropower from NYPA. Niagara County officials are currently investigating<\/a> how much annual revenue they\u2019re missing out on.<\/p>\n The Genesee County IDA has not yet voted on the requested $1.46 billion subsidy package requested by Stream US Data Centers but is poised to do so soon.<\/p>\n Hochul said Monday that she believes her moratorium on state permits for new data centers applies to that project, putting it on pause for now.<\/p>\n Officials with the Genesee County IDA did not immediately return a request for comment.<\/p>\n Despite the massive subsidy package, the IDA has said<\/a> the data center would generate hundreds of millions in payments and taxes that Genesee County would use for a needed overhaul of its water system. That project would be paid for with rate increases without the data center, officials have said.<\/p>\n![](\"https:\/\/www.newsbeep.com\/us-ny\/wp-content\/uploads\/2026\/07\/IP_Event_Benefit_26_B.png\"\/)
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