By Henry Ashcroft
WASHINGTON — Senate Finance Committee ranking Democrat Ron Wyden of Oregon has released draft legislation that would put a new federal excise tax on data center operators and strip the industry of several tax breaks. The proposal lands as developers press ahead with some of the largest projects in the country, including a $19.46 billion data center campus planned for Genesee County.
Mr. Wyden released the text of two bills Friday, Roll Call reported. One would tax data centers. The other, the Stability and Opportunity for Workers Act, would create an income support program lasting up to two years for workers retraining after losing jobs to artificial intelligence. It would also expand unemployment insurance and allow up to 52 additional weeks of benefits through the federal-state Extended Benefits program.
“Americans feel the looming fear of AI job losses, and Congress has a responsibility to help the country prepare,” Mr. Wyden said in a statement. “The support meant to protect workers from financial devastation when they lose their jobs is brittle and out of date, and needs to be updated before the next economic crisis.”
He called the package “a needed first step to give families the wage security they deserve in this time of high costs and economic uncertainty.”
A tax with the rate left blank
The data center measure is a discussion draft, not an introduced bill. It has no bill number or committee referral, and the tax rate itself is left blank, according to a review of the text by Daybreak Wire.
The draft would add a new Chapter 50B to the Internal Revenue Code and levy a percentage tax on gross receipts from data center services provided from U.S. facilities, the outlet reported. It would cover data storage, cloud computing, AI training and inference, and any facility with peak demand of 25 megawatts or more. Web hosting, broadband and corporate IT data centers would be excluded. The tax could not be deducted as a business expense, and the largest hyperscale operators would owe the greater of the regular tax or an alternative calculation.
Mr. Wyden’s August white paper had described a “low single-digit” rate, Daybreak Wire reported. The October draft lowers the size thresholds for the largest operators and replaces the rate language with a blank. The committee has not published a revenue estimate.
The bill would also bar data centers from the research credit for equipment expenses, 100 percent bonus depreciation and Opportunity Zone business breaks, according to a summary cited by Roll Call.
The workers bill’s co-sponsors include Senate Democratic Leader Chuck Schumer of New York and Sens. Michael Bennet and Elizabeth Warren. It also proposes a $250-a-week Jobseeker Allowance. Daybreak Wire noted that the draft does not dedicate the data center tax revenue to pay for the workers’ program.
Republicans and the White House see it differently
Democrats are in the Senate minority, and neither bill can advance without Republican votes. Roll Call described the release as an early signal of Democratic priorities if the party wins back the Senate in the Nov. 3 midterms.
Sen. Mike Rounds, a South Dakota Republican and co-chair of the Senate Artificial Intelligence Caucus, warned in June against taxing the industry. “If you start to tax it, you slow it down, and it goes elsewhere, or it does not move as fast as it will in other parts of the world. That’s not good for America,” he said. “I’d rather have those decisions being made here at the forefront rather than in China.”
The Trump administration has made speeding up data center construction a national priority. In Executive Order 14318, signed in July 2025, President Donald Trump directed agencies to speed permitting for data center projects and the power infrastructure behind them.
“My Administration has inaugurated a golden age for American manufacturing and technological dominance,” the order states. “It will be a priority of my Administration to facilitate the rapid and efficient buildout of this infrastructure by easing Federal regulatory burdens.”
Lawmakers return to Washington on Nov. 9. They face a defense authorization bill and a Dec. 11 government funding deadline, Daybreak Wire reported, citing a Venn Strategies newsletter.
What it could mean at STAMP
In Genesee County, Stream U.S. Data Centers is proposing three data center facilities totaling about 2.2 million square feet at the Western New York Science & Technology Advanced Manufacturing Park, known as STAMP, in the Town of Alabama, The Batavian reported. The $19.46 billion project would sit on a 60-acre North Campus and a 30-acre South Campus on Crosby Road.
The project already faces a state-level pause. In July, Gov. Kathy Hochul issued an executive order setting a temporary moratorium on large-scale data center development while the state writes higher standards and a benefits blueprint for host communities.
Bradley Wells, Stream’s senior site selection and development manager, said after the Oct. 19 town Planning Board meeting that the company remains committed. “From our standpoint and what we’ve proposed here, a lot of the elements that are being talked about within the moratorium … are many of the things we’re already doing as part of this project or on our way to meeting the spirit and intent of that,” he said.
“That’s our intent — to make sure we’re getting this prepared so we can deliver on the commitments that we talk about here,” Mr. Wells said.
Stream revised its South Campus site plan after an environmental review. The new drawings show a 100-foot buffer between the wetlands and the data center site. Genesee County Economic Development Center President and CEO Mark Masse said the change would not shrink the project. “Even if the state takes jurisdiction over those and puts the 100-foot buffer, it’s not going to impact the overall developable acreage that we had planned,” he said, according to The Batavian.
The Planning Board made no decision on the site plan and meets next on Nov. 16.
A federal gross-receipts tax would apply to revenue earned by operators of large facilities like the ones proposed at STAMP. Because the draft does not set a rate, no one can yet say what it would cost such projects. The Wyden proposal would also end bonus depreciation and Opportunity Zone benefits for data centers, two benefits aimed at capital-intensive investment.
The Buffalo Chronicle has asked Mr. Wyden’s Finance Committee office for comment and is seeking comment from Stream U.S. Data Centers and the GCEDC.
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