As QTS Data Centers moves forward with a $1 billion data center campus off Hands Mill Highway in unincorporated York County, a new national study finds that South Carolina is among 14 states that do not publicly disclose how much tax revenue it surrenders to subsidize facilities like it.
The April 2026 report from Good Jobs First, a Washington D.C. watchdog organization focused on economic development incentives, found that South Carolina fails to report data center tax abatement revenue losses anywhere, including in its Annual Comprehensive Financial Report, the audited spending document that is the proper vehicle for such disclosures under Generally Accepted Accounting Principles.
The state previously included data center tax abatement costs in its Tax Expenditure Report but stopped doing so beginning with its fiscal year 2024 report. The South Carolina Department of Revenue cited the small number of qualifying companies as the reason, claiming legal disclosure constraints prevent it from publishing even an aggregate cost figure.
Good Jobs First disputes that reasoning. The organization argues that revealing one total dollar amount for all data centers statewide cannot expose any individual company’s confidential tax information, pointing out that sales taxes are not income taxes and that the figure would contain no company-specific data.
“No form of state spending is more out of control today than data center tax abatements,” Greg LeRoy, executive director of Good Jobs First and lead author of the study, said in a statement. “Hyperscale data centers are not only extractive of electricity, water, and land; they are also undermining public budgets.”
The report documents how tax abatement laws written years ago for much smaller facilities are now generating losses that states never anticipated, as artificial intelligence demands have driven the construction of what the industry calls “hyperscale” campuses. States that do disclose are reporting staggering sums: Georgia reports losing $2.5 billion per year, Virginia $1.94 billion, and Texas $1 billion, with several states seeing known losses grow more than 1,000 percent in just three or four years.
The accounting standard at the center of the report, Governmental Accounting Standards Board Statement No. 77, has required states and localities to disclose tax abatement revenue losses since fiscal year 2017. The rule covers both governments that grant abatements directly and those that lose revenue indirectly as a result of another government’s action. About 70 percent of U.S. local governmental entities use GAAP accounting, meaning the disclosure obligation extends well below the state level.
That local dimension is particularly relevant for York County. Under South Carolina’s sales and use tax structure, when the state abates its portion of the tax, local governments often absorb a share of the revenue loss without granting the abatement themselves. Those so-called passive losses are also subject to mandatory disclosure under Statement 77, yet the study found that local governments in states like South Carolina are not reporting them.
QTS Data Centers, a company with more than 90 facilities across the country, is constructing the York County campus near Lake Wylie along South Carolina Highway 274. The company describes the project as one of the most flexible and efficient data center campuses in South Carolina, designed for rapid, large-scale deployment in the greater Charlotte market.
York County residents began raising concerns about the project last fall, prompting community meetings and eventually a significant regulatory overhaul. In March 2026, the York County Council passed the second reading of a new ordinance that moved data centers from a permitted use to a special exception in light industrial and industrial development zones, requiring developers to undergo public review before the Board of Zoning Appeals. The vote was 5 to 2, with council members Andy Litten and Bump Roddey in opposition.
The new rules require mandatory acoustic studies by licensed engineers, closed-loop cooling systems to reduce water consumption, prohibitions on groundwater well use, increased setbacks from residential property lines, and full disclosure of projected water and electrical demand. Generators are restricted to emergency use and periodic testing.
Council Chairwoman Christi Cox invoked the pending ordinance doctrine, meaning the stricter standards applied immediately to any new development plans submitted after the initial February 6 special meeting.
Good Jobs First recommends that all states and localities bring their financial reporting into full compliance with Statement 77, including retroactive disclosure going back to fiscal year 2017. The organization also calls on state comptrollers, auditors, and treasurers to publish annual reports showing the share of revenue lost by each local governmental body due to state-level abatements, citing Nevada’s Controller as a national model for that kind of transparency.
The full report is available at goodjobsfirst.org.
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