Trump-backed tax break a windfall for controversial industry — now GOP senator wants 'corporate welfare' cut

FIRST ON FOX: Anxieties over data centers have cranked up considerably, and one Senate Republican wants to close a tax loophole that he argues tech giants are using as "corporate welfare" to build facilities throughout the country.

Sen.

Josh Hawley, R-Mo., plans on introducing legislation that would tie up a tax loophole for data centers first unleashed by Republicans in 2017 that he charged has been exploited by tech companies to build their sprawling data center facilities.

It comes as the GOP wrestles with how to handle the data center and AI issue, which has become a major political wedge on the campaign trail.

And one that President Donald Trump has called a "hoax." 'WHY WOULD HE DO THIS TO US?': ONE CRUCIAL TRUMP DECISION IS HURTING HIS BASE, REPUBLICANS WARN That loophole, Hawley told Fox News Digital in an interview, is for Opportunity Zones, which he said are generally meant for "for low-income areas, low-income housing, low-income businesses or businesses in low-income areas." "These data centers have figured out a way that they think that they can access all of this money," Hawley said.

"So let's be clear, this is a form of corporate welfare.

They don't need any welfare.

These people are rich, they can pay their own way." The tax breaks were first approved by Congress as part of Trump’s first-term tax cuts package, the Tax Cuts and Jobs Act of 2017.

That initial bite at the apple established them as a means to spur investment into lower income or forgotten areas where tracts of land were dubbed Opportunity Zones.

AI'S MASSIVE APPETITE FOR POWER, WATER IGNITES FIGHT IN HIGH-STAKES TEXAS SENATE RACE They were then made permanent last year through the "big, beautiful bill," and though not explicitly intended to be used for data centers, have since provided a route for tech companies to defer, reduce or outright eliminate corporate gains taxes on their investments in the zones.

Since both tax packages were passed, 8,746 Opportunity Zones have cropped up in the U.S., according to the Department of Housing and Urban Developmen t — just under half of all zones are in rural areas, where tech goliaths have set their sights on building data centers.

And, according to a report from the National Community Reinvestment Coalition, 14% of all data centers are in Opportunity Zones, while just over 17% of all permitted, approved and under construction data center projects are in the zones.

Hawley's forthcoming bill would explicitly exclude data centers from being able to access the tax cuts, adding another barrier at the federal level in an attempt to try and slow their rapid development.

And it comes as Congress scrambles to answer the growing fears over unfettered AI development, which data centers play a key role in.