The Texas Senate Committee on Finance met this week to hear from dozens of witnesses regarding the pros and cons of AI data centers being built or considered in the Lone Star State.
Texas State Senator Angela Paxton (R) reported that she’s hearing a lot of pushback on data centers from her constituents, who claim there is a lack of transparency from the corporations.
Paxton suggested that companies who want to build AI data centers in Texas should emphasize ethical standards and engage with residents early on, “so they have choices.”
Paxton added, “None in my communities want these imposed upon them. That just kind of goes against the entire grain of what it means to be a Texan. We want to choose.”
Democratic Texas State Rep. Gina Hinojosa, who is running against incumbent Republican Governor Greg Abbott, is circulating video from the hearing. The video features witness Dan Diorio, EVP of state policy and government affairs from the Data Center Coalition, a membership organization for the data center industry.
Diorio, who lives in Colorado, was asked if there were a lot of data centers in his state. He replied, “We don’t because Colorado actually does not have a state sales tax exemption for data centers,” which triggered a few in the room to applaud.
Hinojosa wrote with the video: “Greg Abbott waived all sales tax for data centers in Texas—creating the largest taxpayer giveaway in the country.”
Greg Abbott waived all sales tax for data centers in Texas—creating the largest taxpayer giveaway in the country. pic.twitter.com/QNHal7eylb
— Gina Hinojosa (@GinaHinojosaTX) July 28, 2026
When one X user replied to Hinojosa “No. Texas Governor Greg Abbott has not waived sales taxes for data centers. He has publicly called for repealing the existing state sales tax exemptions for them,” the gubernatorial nominee replied with an image of a bill signed by Abbott.
It’s understandable why you would believe that since Abbott now claims he is against data centers, but here is his signature on the bill that waived all their sales tax. A bill he has the sole power to undue today if he signed an executive order or called a special session to fix… pic.twitter.com/kPwy9SZ5JL
— Gina Hinojosa (@GinaHinojosaTX) July 28, 2026
Hinojosa replied: “It’s understandable why you would believe that since Abbott now claims he is against data centers, but here is his signature on the bill that waived all their sales tax. A bill he has the sole power to undo today if he signed an executive order or called a special session to fix the mess he made.”
While another critic on X knocked Hinojosa for amplifying an 11-year-old bill — H.B. 2712 was signed by Abbott in 2015 — the bill notes that it “extends a temporary state and local sales and use tax exemption for qualifying large data center projects from 15 years to 20 years.”
The Texas Tribune reported that according to the Texas Comptroller’s Office, state taxpayers have granted nearly $2.8 billion in sales tax breaks to data centers between 2014 and 2026, so far.
[NOTE: Earlier this month, after Hinojosa criticized the Governor on the issue, Abbott called for more regulations on data centers in Texas and said AI data centers shouldn’t be built in rural Texas neighborhoods.]