Amazon has now committed roughly $26 billion to data centers in Indiana, the largest set of technology investments in the state’s history. As the projects rise near New Carlisle and across Northern Indiana, a familiar story is taking shape in headlines and county meetings: that Indiana is handing billions in “subsidies” to a tech giant while Hoosiers get little in return. The numbers tell a different story, and Indiana families deserve the full picture before that narrative hardens.
Where the “Subsidy” Number Really Comes From
Activist groups have spent the past year describing Indiana’s data center incentives as among the most generous subsidies in the country. The figure they cite is not money the state has paid out. It is an estimate of sales tax that Indiana will decline to collect on data center equipment over many years, added up and presented as a giveaway.
Here is what that tax policy actually does. In 2019, Indiana passed a law exempting qualified data center equipment from sales tax, the same way the state already exempts the machinery bought by Indiana farmers, steel mills, and manufacturers. A farmer does not pay sales tax on a new combine, and a manufacturer does not pay sales tax on a new production line. Treating servers and AI chips as the business equipment they are is how Indiana competes for investment that would otherwise land in another state.
The exemption also comes with conditions. A company qualifies only after it commits to a large investment and meets the thresholds written into the law. No investment means no exemption. The headline number assumes decades of construction and equipment purchases that depend entirely on companies choosing to build in Indiana in the first place.
What New Carlisle Actually Brought to St. Joseph County
When Amazon Web Services announced its New Carlisle campus, state officials called it the largest capital investment announcement in Indiana’s history, about $11 billion across roughly 800 acres. The campus has already hired about 80 percent of its workers from the surrounding community and runs training programs that prepare local residents for technical careers.
The local incentive package shows how partial these arrangements really are. St. Joseph County approved a 10-year, 50 percent abatement on real property for the project, well short of a full exemption. Everything above that abatement is new revenue the county now collects on land that used to sit vacant, money that funds schools, roads, and first responders while easing the property tax burden on local homeowners. Statewide, Amazon reports investing more than $31 billion in Indiana since 2010 and contributing nearly $30 billion to the state’s economy.
Who Pays for the Power
The loudest fear about data centers is that they will push up electricity bills for everyone else. Indiana’s largest project answers that fear head on. Under its agreement with NIPSCO, Amazon is covering the full cost of building out the 2.4 gigawatts of power its Northern Indiana campuses will need, and the arrangement is projected to save existing Indiana customers around $1 billion over 15 years.
That result is not unique to Indiana. Virginia hosts more data centers than anywhere in the world, and a state audit there found that data centers are not shifting their energy costs onto ordinary ratepayers and that regulators have the tools to keep it that way. Because large electricity users carry a bigger share of the fixed costs of running the grid, they can actually lower the per-customer cost for the families and small businesses connected to the same system.
What Indiana Stands to Gain
Data centers are the backbone of the digital economy. Every search, payment, stored photo, and AI tool that Hoosiers rely on runs through one. They can be built almost anywhere the country has connectivity, so they go to the communities that welcome them and the utilities with power to spare. Nationally, the data center industry contributed an estimated $727 billion to GDP and supported 4.7 million jobs in 2023, and America’s tech sector now leads every other industry in capital investment.
We have watched this choice play out in state after state. The communities that say yes capture the jobs, the tax base, and a stake in the infrastructure that will decide whether America or China leads in AI. The communities that turn these projects away do not stop them from getting built. They simply watch the investment and the property tax relief that comes with it go somewhere else.
Indiana made a smart bet by competing for data centers, and Hoosier communities are already collecting the return. Before anyone calls that a giveaway, they should ask who actually benefits when the next billion-dollar investment skips Indiana for a state that was glad to have it.
Image via Wikimedia Commons.
