Kentucky Must Welcome Data Centers for Jobs, Growth, and Tax Revenue
Kentucky is at a crossroads. With demand for cloud storage and artificial intelligence growing at historic rates, the state has an opportunity to attract billion-dollar data centers that could transform local economies. These facilities are not just warehouses of servers — they are job creators, tax generators, and anchors of modern economic development.
The need for data storage is only accelerating. Every Kentuckian who saves photos, videos, or messages to the cloud contributes to the expanding demand. Businesses across the state also rely on cloud platforms to host applications and serve customers. Artificial intelligence, in particular, is increasing this demand, and the data centers that power AI must be located somewhere. Kentucky can either seize this chance or watch it pass to other states.
One of the greatest incentives already exists: sales tax exemptions for data center equipment. Kentucky recently extended these exemptions, leveling the playing field with other states that have successfully attracted hyperscale centers. No major data hub has located in a state that taxes servers and related equipment, since upgrades occur every four to five years and would otherwise add millions in costs. Just as farmers and manufacturers are not taxed on essential machinery, data centers should receive the same treatment to spur investment.
Critics often question whether data centers will drive up electricity bills. Yet evidence from Northern Virginia — home to the largest concentration of data centers in the world — shows the opposite. A state audit there found that ratepayers are not subsidizing data centers, and Missouri utilities have confirmed that large-scale customers actually absorb more of the fixed costs of power infrastructure, lowering rates for households. In Virginia’s Loudoun County, data centers generated $895 million in property tax revenue last year alone, proving their immense value to local communities.
The benefits extend beyond tax revenue. A single hyperscale facility could bring up to 160 high-paying jobs, many accessible to local graduates of high schools and trade programs. Construction and support industries also benefit from long-term contracts tied to these projects. Unlike many forms of economic development, data centers require little in the way of public subsidies — they pay their own way for infrastructure while leaving behind a steady stream of tax revenue.
Kentucky has a pivotal choice to make. By embracing data centers, the state can position itself as a leader in high-tech investment, create thousands of jobs over time, and secure millions in local revenue. The alternative is to let this historic opportunity — and its economic promise — go elsewhere.