Wyden, Whitehouse, Warren, Cortez Masto, Hassan, Luján, Welch, Question Meta’s Use of Billions in Research and Development Tax Credits to Subsidize Its AI Data Center[...]

Wyden, Whitehouse, Warren, Cortez Masto, Hassan, Luján, Welch, Question Meta's Use of Billions in Research and Development Tax Credits to Subsidize Its AI Data Center Construction Boom

Washington, D.C. - Senate Finance Committee Ranking Member Ron Wyden, D-Ore., along with Senators Sheldon Whitehouse, R.I., Elizabeth Warren, Mass., Catherine Cortez Masto, Nev., Maggie Hassan, N.H., Ben Ray Luján, N.M., and Peter Welch, Vt., called on Meta to justify its use of billions in federal research and development tax credits to fund its rapid buildout of AI data centers, in a letter to Meta CEO Mark Zuckerberg today.

According to recent reporting, Meta claimed its AI data centers are experimental "pilot models", and therefore eligible for federal R&D tax credits. That is a potential misuse of that credit, which is intended to incentivize experimental research, not to scale up established computing infrastructure. As Meta spends tens of billions of dollars on AI data centers, its R&D tax credits have grown from $700 million in 2023, to $4 billion in 2025.

"The federal research credit can be a useful and necessary tool to support our nation's innovation economy and cutting-edge research," the members wrote. "Subsidizing your A.I. data center build is not close to meeting this standard."

If the reporting is accurate, Meta's R&D tax credit claims would represent more than 10 percent of all research tax credits claimed in the U.S., based on Joint Committee on Taxation figures.

"Any effort by Meta to use A.I. data center expansion as eligible for research credits is potentially a significant misapplication of federal tax law that merits further investigation," the senators continued.

Meta has a long record of attempting to lower its tax bill through dubious tax credit claims. In 2013, Meta claimed that $4.1 billion Zuckerberg received by exercising stock options should be eligible for research credits. The IRS challenged that claim and is seeking $355 million in back taxes from Meta.

The members demanded Meta answer the following questions:

1. Has Meta claimed tax credits under Section 41 of the Internal Revenue Code for tax years 2023 through 2025, related to the buildout and operation of its A.I. data centers? If yes, please describe the legal justification for claiming these federal research credits, the types of research and experimentation expenditures Meta claimed were eligible for the federal research credit, and the total dollar amount of federal research credits Meta claimed for expenses related to A.I. data centers.

2. Has Meta claimed to the IRS on federal tax filings that its A.I. data centers are "pilot models" in order to qualify for the federal research credit under Sections 41?

3. Has Meta taken the position that expenses related to A.I. data centers are eligible for the federal research credit while expenses related to non A.I. data centers are not? If yes, please provide a legal analysis explaining why Meta believes that expenses related to its A.I. data centers are eligible for federal research credits while data centers unrelated to A.I. are not.

4. Did Meta consult with experts from EY or any other professional accounting firms prior to making the decision to claim federal research credits for expenses related to A.I. data centers? If yes, please describe these interactions and whether EY or any other professional service firms advised Meta that expenses related to A.I. data centers qualified for the federal research credit.

5. Did EY or any other professional accounting firm or law firm provide an opinion or opinions on whether expenses related to A.I. data centers were eligible to be claimed for the research credit? If so, please provide copies of such opinions.

6. In 2023, Meta disclosed that it claimed $700 million in federal research and development tax credits. How much of those tax credits was related to the construction or operation of A.I. data centers? Please specify how much of the federal research credits Meta claimed that year was for the purchase of microchips, computing equipment and other materials necessary to build or operate A.I. data centers.

7. In 2024, Meta disclosed that it claimed approximately $2 billion in federal research and development tax credits. How much of those tax credits was related to the construction or operation of A.I. data centers? Please specify how much of the federal research credits Meta claimed that year was for the purchase of microchips, computing equipment and other materials necessary to build or operate A.I. data centers.

8. In 2025, Meta disclosed that it claimed approximately $3.9 billion in federal research and development tax credits. How much of those tax credits was related to the construction or operation of A.I. data centers? Please specify how much of the federal research credits Meta claimed that year was for the purchase of microchips, computing equipment and other materials necessary to build or operate A.I. data centers.

9. Why did Meta claim that $4.1 billion in stock-based compensation for Mark Zuckerberg between 2008 - 2010 was a "qualified research expense"? Please provide a detailed justification as to why the CEO compensation for Mr. Zuckerberg serves a research or experimental purpose.

10. Does Meta intend to continue challenging the $355 million in back taxes the IRS is seeking related to treating Mr. Zuckerberg's stock-based compensation as a qualified research expense? If yes, why?

The full letter is here.

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