34 Ways to Tax AI - Policymaker proposed or enacted

Oct 22, 2026

The paper argues that today’s AI boom is supported by preferential tax policies and contributes little to the public fisc, creating risks if AI accelerates job displacement. It explains how tax policy can shape corporate behavior, require data centers to bear community costs, discourage layoffs and speculative investment, and limit concentrated power. Instead of recommending a single plan, it catalogs 34 distinct tax approaches across local, state, and federal jurisdictions covering data centers, chips, data, AI companies/products, automation, and broader tax reforms.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages31

Reading Time1 h 18 min

AccessFree to download

Executive Summary

Introduction

Data Center Taxes

Chip Taxes

Data Taxes

AI Company and Product Taxes

Automation Taxes

General Tax Reforms Relevant to AI

Conclusion

1 Oct. 2026 34 Ways to Tax AI [vu.edu/vpa](vu.edu/vpa) 2 ABOUT THE VANDERBILT POLICY ACCELERATOR The Vanderbilt Policy Accelerator focuses on cuttingedge topics in political economy and regulation to swiftly bring research, education, and policy proposals from infancy to maturity. ABOUT THE AUTHOR Asad Ramzanali is the Director of AI and Technology Policy at the Vanderbilt Policy Accelerator for Political Economy and Regulation. Acknowledgements: For helpful comments and conversations that informed and improved this paper, the author thanks Jeremy Bearer-Friend, Jeﬀ Gordon, Nathalie Maréchal, David Mitchell, Ganesh Sitaraman, Mona Sloane, Joseph Waldow, and several congressional staﬀ, along with attendees of a roundtable on Taxing AI hosted by the Vanderbilt Policy Accelerator. The author also thanks Jake Miller for research assistance. Table of Contents Executive Summary.....................................................................................................4 Introduction ..................................................................................................................5 I. Data Center Taxes ....................................................................................................8 II. Chip Taxes .............................................................................................................. 14 III. Data Taxes ............................................................................................................ 16 IV. AI Company and Product Taxes ...................................................................... 18 V. Automation Taxes ................................................................................................ 25 VI. General Tax Reforms Relevant to AI............................................................... 28 Conclusion .................................................................................................................. 31 [vu.edu/vpa](vu.edu/vpa) 3 Executive Summary Today’s AI boom is funded in part by preferential tax policies and contributes little to the public ﬁsc. If AI causes job loss, the tax base will take a bigger hit. But tax policy can do more than raise government revenue: taxes can drive companies to pay their fair share, make data centers bear the costs they impose on communities, discourage layoﬀs and speculative investment, and check power. Rather than recommend one approach, this paper outlines 34 diﬀerent ways to tax AI across local, state, and federal jurisdictions. If policymakers fail to tax AI, it will not be for lack of options. | 34 Ways to Tax AI
Policymaker proposed or enacted: L Local S State F Federal
Could adopt: L Local S State F Federal | | | --- | --- | | Data Center Taxes Who pays: Data center operators, owners, investors; cloud providers 1. Data center sales and use tax L S
F 2. Data center real property tax L S
F 3. Data center electricity tax L S
F 4. Data center emissions tax L S
F 5. Data center water fee L S
F 6. Data center facility fee L S
F 7. Data center gross receipts tax L S
F 8. Federal tax preference ineligibility L S
F 9. Cloud computing tax L S
F 10. Universal Service Fund expansion L S
F Chip Taxes Who pays: Data center operators; chip importers and exporters 11. Computer equipment tax L S
F 12. AI chip tariﬀ or export fee L S
F Data Taxes Who pays: AI model makers, platforms, and data brokers 13. Data tax L S
F 14. Surveillance data tax L S
F 15. Data broker tax L S
F
| AI Company and Product Taxes Who pays: AI companies and enterprise users 16. AI revenue tax L S
F 17. Token tax L S
F 18. Digital services tax L S
F 19. Surveillance advertising tax L S
F 20. Digital goods sales tax L S
F 21. Robot gross receipts tax L S
F 22. Robotaxi tax L S
F 23. Windfall proﬁts tax L S
F 24. Public ownership L S
F 25. AI personho

Oct 22, 2026

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