Senator Files Bill to Repeal Data Center Tax Break

Senate Bill 293 would end Texas sales tax exemptions for data centers created in 2013.

Updated on Nov. 9, 2026 in Data Centers

Wide photograph of the Texas State Capitol dome above a flat lawn under a clear sky, with a distant industrial building on the horizon. — Texas State Senator Joan Huffman filed Senate Bill 293 to repeal state sales tax exemptions for data centers, which the Comptroller estimates would forgo $3.3 billion in revenue. AI Illustration. Upload story photo >

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Should Texas repeal sales tax exemptions for data centers?

Texas State Senator Joan Huffman filed Senate Bill 293 to repeal the state's data center sales tax exemptions. A majority of senators joined Huffman as joint authors of the bill.

Why it matters

Huffman states the Comptroller's estimated $3.3 billion in forgone sales tax revenue for the coming biennium is not what the Legislature voted for and is not sustainable. Her position is that no tax exemption should run on autopilot.

The data center sales tax exemption was created in 2013 and cost taxpayers about $14.6 million in its first biennium, according to the report. The Comptroller projects $3.3 billion in forgone sales tax revenue for the coming biennium, a figure the report does not break down by project.

The players

Joan Huffman

Joan Huffman is a Republican member of the Texas State Senate who filed Senate Bill 293 and has been a leading voice on state tax policy.

The details

Senate Bill 293 repeals Tax Code Sections 151.359 and 151.3595, the provisions that create the data center exemption. Existing exemptions would expire on the bill's effective date, and any applications pending with the Comptroller on that date would be denied.

2013: The data center sales tax exemption was created.
Monday, before November 9, 2026: Senate Bill 293 was filed.
Coming biennium: Comptroller estimates $3.3 billion in forgone sales tax revenue.

Tech Race

The 2013 exemption under Tax Code Sections 151.359 and 151.3595 is the legal foundation for Texas's data center tax treatment. Senate Bill 293 would reverse that foundation, putting the state's tech-incentive approach in direct tension with its revenue projections.

If enacted, the bill would deny pending exemption applications on its effective date, changing the cost structure for data center projects in Texas. Companies and local communities that depend on those projects would face different tax assumptions going forward.

The takeaway

Tax exemptions can persist long after the policies that justified them, so periodic review matters for public budgets. Readers following Texas tech policy should watch whether SB 293 advances through committee.