A significant number of U.S. states fail to properly account for tax revenue lost to datacenter subsidies, says Good Jobs First. The non-profit organization highlights that many local governments are non-compliant with GAAP by not disclosing financial losses from these tax breaks, which are reportedly running into billions of dollars.

According to a recent report, only a few states transparently report these financial figures, with Washington, Texas, and Virginia being among them. Most others choose to list these losses in their Tax Expenditure Reports (TERs) rather than the audited Annual Comprehensive Financial Reports (ACFRs).

The report emphasizes the rapid growth of datacenters, driven by developments in AI technology, and the large-scale consumption of resources they entail. This expansion, coupled with inadequate reporting, is leading to a significant misalignment in state finances.

Good Jobs First calls for immediate reform, urging that all states should adhere to GAAP’s guidelines for transparent financial reporting. The organization stresses the importance of these disclosures to rectify public budget imbalances caused by the alluring but costly tax incentives granted to massive datacenter operations across the country.