Kentucky lawmakers may tweak data center tax breaks, but Senate President Stivers rules out a repeal

FRANKFORT, Ky. (Nov. 8) — Kentucky's top state senator says the tax breaks lawmakers passed for data centers in 2025 may get some changes, but he doesn't see them going away.

Senate President Robert Stivers, a Manchester Republican, told WUKY that the package is narrower than critics make it sound. "Actually, it's the most narrow set of incentive packages we have," he said, adding that data centers pay taxes like any other business except for the sales tax on chips.

Stivers didn't say what changes are under discussion beyond clarifying some tax language. State Sen. Robby Mills suggested in August that lawmakers could shorten how long the breaks last, WUKY reported.

The incentives haven't been used yet. A Kentucky Center for Economic Policy report estimated they could cost the state more than $2 billion in revenue if companies apply for them, and a number of Kentucky communities have answered the build-out with bans, moratoriums or tighter rules, according to the station. The state has more than two dozen operating data centers, the Kentucky Association of Counties says.

Electric cooperatives weighed in at the Capitol on Thursday. Leaders from East Kentucky Power Cooperative and Big Rivers Electric told lawmakers that data center developers should pay every cost tied to their projects, from early studies to new transmission lines, WDRB and WAVE reported.

"Number one, protect our member consumers from project risks and cost exposures," said Don Gulley, president and CEO of Big Rivers Electric Cooperative. Co-op leaders said that if developers cover those costs up front, data center contracts could help steady local electric rates over time.