U.S. Senator Tina Smith Requests Cost Estimate of Big Beautiful Bill’s Data Center Tax Incentives

WASHINGTON - U.S. Senator Tina Smith (D-MN), in her capacity as the top Democrat on the Senate Fiscal Responsibility and Economic Growth Subcommittee, is requesting an analysis to shed light on the extent to which OBBBA tax breaks went to data center development. Smith sent the request to the Joint Committee on Taxation after reports that some of the country's largest corporations taking advantage of the generous corporate tax breaks in Republicans' signature legislation to subsidize the development of data centers.

"We've seen reports that tax breaks from the Big Beautiful Bill are being used by some of the biggest tech companies in the world to pad their pockets and boost the buildout of data centers. These companies have billions of dollars of revenues, and I question the fiscal rationale behind rewarding them for investments they would have made regardless of the tax benefits," says Senator Smith. "How is it that Republicans could find the money for these massive companies to build deeply unpopular data centers, but not the money for health care and nutrition assistance? It's complete hypocrisy and reeks of corruption, considering these same companies routinely donate millions of dollars to the President's campaign."

Data centers and the trillion-dollar tech companies building them have reported record profits, which likely were boosted thanks to the OBBBA. OBBBA provisions most commonly utilized include expanded breaks for research and development programs, immediate deductions for the cost of investments, and a new subsidy for manufacturing structures. Senator Smith questions the fiscal rationale of the federal government subsidizing projects that are widely opposed by local communities and driving up electricity and water bills across the country, particularly at a time where the federal deficit and national debt have each reached record levels.

You can find full text of the request here or below.

Thomas A. Barthold, Chief of Staff

Joint Committee on Taxation

502 Ford House Office Building

Washington, DC 20515

Dear Mr. Barthold:

Thank you for your ongoing work to provide Congress with information related to P.L. 119-21, the One Big Beautiful Bill Act (OBBBA).

As you know, this legislation included several tax provisions designed to spur business investment. But by the time it was enacted in July 2025, domestic investment was already growing, fueled in large part by record spending on artificial intelligence data centers and related infrastructure. Recent reports suggest the tax incentives enacted by OBBBA have resulted in a windfall for companies spending heavily on the AI data center buildout, rewarding them for investments they would have made regardless of the tax benefits.

Last month, the Congressional Budget Office found that corporate income receipts decreased by 25 percent over the first 11 months of FY 2026, even as corporate profits surged to historic levels. This cost is ultimately borne by taxpayers. As corporations pad their profits, the United States' fiscal outlook is worsening, resulting in higher prices and borrowing costs for Americans.

To help Congress better understand the deficit impact of OBBBA, I request that the Joint Committee on Taxation analyze the extent to which the bill's tax provisions have subsidized the AI data center buildout thus far, including the revenue effects of these benefits.

Thank you in advance for your assistance.

Sincerely,

Tina Smith

Ranking Member

Subcommittee on Fiscal Responsibility and Economic Growth