Data Center Law in Ohio and Michigan

Primary sources are linked where cited — state statutes, governors’ offices, and commission orders. Current as of July 30, 2026. Two items are live as this publishes: a township referendum set for August 4, and the Palisades nuclear restart, expected but not yet completed.

The April draft opened with the land rush: central Ohio one of the largest data center markets in the country, Michigan pushing to attract the next wave, billions in investment behind every press conference. Data centers drew a reported $27 billion of capital investment into Ohio in 2025 alone. The Michigan pipeline now includes a 1.4-gigawatt campus under construction southwest of Ann Arbor.

In April, the legal work focused on closing deals. By July, much of it meant defending them — against township challenges, disputes over ratepayer costs, and in one case the state that wrote the incentive.

Michigan and Ohio tax incentives diverged

Michigan expanded its tax incentives. The enterprise data center exemption became law at the end of 2024 and took effect in April 2025. It gives sales and use tax relief to facilities with at least $250 million of investment and thirty qualified jobs paying 150 percent of the regional median wage. The relief runs through 2050, or 2065 on brownfield and former power plant sites. Then, on July 15, the governor asked developers to sign a pledge: ten commitments to carry their own energy, grid, and water costs, with statutory ratepayer protections to follow. Oracle and Google signed. A pledge is not a moratorium, but it is a state telling the industry the free-attraction phase is over.

Ohio moved to limit its incentives. Its exemption, R.C. 122.175, gives sales tax relief on data center equipment for projects clearing $100 million of investment and $1.5 million of payroll. The exemption helped build the Columbus market. It also cost far more than projected: roughly $1.57 billion in the last fiscal year against an original estimate near $136 million. The legislature tried to shut off new awards in the budget; the governor vetoed that. Then in May the same governor paused new exemptions himself while a joint committee studies the program. Legislative leaders have said they intend to override the veto and end new awards outright. Existing agreements stand. New ones wait.

The April draft said the legal work in incentives was in the details — what counts toward the investment threshold, how the state counts jobs, what triggers a clawback. One detail got bigger: what happens to your agreement when the program that created it becomes a political target. Anyone negotiating in either state should be reading the clawback and change-in-law provisions the way Ohio’s early recipients wish they had.

Power became the fight

The April draft treated utility agreements as complex contracts worth careful review. Four months later they are contested rate proceedings with appellate dockets.

In Ohio, the commission approved AEP Ohio’s data center tariff last summer. New loads over 25 megawatts commit to twelve-year contracts, pay minimum monthly charges on 85 percent of subscribed capacity whether they use it or not, and face exit fees measured in years. Amazon, Google, Meta, and Microsoft opposed it. The Ohio Manufacturers’ Association appealed, and the case is now pending at the Ohio Supreme Court. However it comes out, the case tests a principle every state is watching: whether the biggest new loads can be made to carry their own grid risk.

Michigan built its version in parallel. The commission approved Consumers Energy’s large-load terms in November: loads of 100 megawatts and up, fifteen-year minimum contracts, and 80 percent minimum billing. In December it approved DTE’s special contracts for the 1.4-gigawatt Saline Township campus, with a general large-load tariff still pending. And the state’s most-watched power story sits across the state: the Palisades nuclear plant, expected to be the first restart of a shuttered reactor in American history, with fuel on site and no announced date.

A fifteen-year commitment to pay for 80 percent of capacity you may not use is one of the project’s largest financial obligations. Negotiate it as carefully as the ground lease.

Zoning, moratoria, and referendum fights

The April draft predicted that communities without clear zoning frameworks would end up in litigation with developers or neighbors, sometimes both. Saline Township ran the full script in under a year: the board rejected the project, the developer sued, the township settled and let it proceed, and a zoning maneuver in January blocked the citizens’ referendum. Construction is underway. Nearby, Augusta Township’s 522-acre proposal goes to the voters on August 4 — an actual ballot question on a single land-use decision.

The moratorium is now the default municipal move. By one running count, more than fifty Michigan municipalities have enacted data center moratoria, and a wave of Ohio local governments (Jackson, Jerome, Boardman, Butler County) have done the same. Several Michigan proposals have been withdrawn. For developers, the local process is no longer a formality after the state incentive; it is the project’s least predictable step. For municipalities, the communities that write clear, predictable frameworks will get the projects on their terms. The ones that improvise will get the litigation.

What survived from April

The employment analysis held up. Data centers still need two workforces at two different times — hundreds of construction trades on compressed schedules, then a small permanent team of facilities engineers and technicians who are scarce everywhere and scarcer here. Operators still compete for that pool with noncompetes and nonsolicits that tend to run broader than Michigan and Ohio courts will enforce. What changed around that analysis: the FTC’s noncompete ban is formally dead, removed from the Code of Federal Regulations in February, and the agency now attacks individual employers’ agreements case by case. Michigan’s proposed near-total ban sits in committee. Reasonableness doctrine governs, employer by employer, so careful drafting matters.

One claim from April does not survive: I wrote that Ohio incentive packages often trigger prevailing-wage requirements. They do not. Ohio’s prevailing-wage law reaches public improvements financed with public funds, and a sales tax exemption is neither; the federal version turns on federal money. Wage terms on these projects come from negotiated labor agreements, not the incentive statute. The construction section’s core needed no correction: delay risk flowing downhill through liquidated damages, supply-chain force majeure getting tested, and change orders turning into seven-figure arguments as tenant specs evolve mid-build.

The name

The April draft ended by saying this body of work was a practice area without a name: employment, commercial, real estate, energy, and public incentives, converging on one asset class. Four months supplied the rest: a paused exemption and a repeal fight, a tariff appeal at a state supreme court, commission dockets in two states, a township referendum with a construction schedule riding on it, and fifty-odd moratoria. The dockets show why this work belongs together.