Senator Ron Wyden (D-OR), the ranking member of the Senate Finance Committee, has proposed a tax on new data centers, as outlined in a five-page white paper released on August 6, 2026. The proposal seeks public feedback and aims to address concerns regarding land usage, electricity costs, and environmental impacts associated with the rapid expansion of data centers, which are essential for artificial intelligence development.
Wyden's proposal includes two potential revenue sources: the removal of existing tax incentives for data centers and the introduction of a "data center public investment excise tax" on new facilities. The white paper notes that hyperscaler spending on data centers is projected to reach approximately $700 billion, exceeding Argentina's GDP.
The proposal emphasizes the need for resources to support communities and workers affected by the data center boom. It suggests that the excise tax would be a gross receipts tax at a low single-digit rate, with measures to prevent tax avoidance. Additionally, the tax would apply to data centers located in space, as proposed by figures such as SpaceX CEO Elon Musk and Amazon CEO Jeff Bezos.