Ohio Data Center Contracts: Accounting and Tax Risks to Know
Ohio has become a major destination for data center development, with dozens of large campuses built, under construction, or announced across the state. For manufacturers and commercial contractors, that means opportunity. It also means contracts that are bigger and more complex than what many teams are used to. Before you say yes, it pays to know what the work will do to your financials, your tax position, and your operations.
Revenue Recognition Gets Harder as Contracts Get Bigger
Large data center contracts often bring modifications, change orders, and variable consideration, all of which affect when and how much revenue you recognize under ASC 606. Measuring progress on a long-term project, tracking contract costs, and managing contract assets and liabilities on your balance sheet all demand more rigor. Ask yourself:
Do we understand how revenue will be recognized on this contract?
Does it include terms that could change the timing or amount of revenue?
Can our WIP reporting and estimates keep up with a project this size?
Growth Carries Financial and Operational Risk
One large customer can quickly dominate your revenue. That raises concentration risk, and it affects lenders, investors, and any future sale of the business. Serving the work may also require new equipment, inventory, or facilities. Before committing, consider what investment the contract demands, how you’ll finance it, and whether your accounting systems and internal controls can handle a significantly larger or more complicated project.
Don’t Assume Your Sales Tax Treatment Will Hold
Ohio has offered a sales and use tax exemption for qualifying equipment and construction materialsincorporated into certain data centers. The rules generally distinguish between materials that become part of the facility and tools or equipment a contractor uses but doesn’t leave behind. That distinction matters for how you price and document your work.
The policy landscape is also shifting. In May 2026, the governor paused consideration of new data center exemption requests while a legislative committee studies the issue, and legislation addressing the exemption has been introduced. Existing approved agreements have been reported as unaffected. Because treatment for future projects is uncertain, confirm a project’s exemption status before you bid, consider contract language that allocates tax risk if the rules change, and keep clear records of what you provide.
A Quick Pre-Bid Checklist
Is the contract profitable after accounting for estimates and risk?
What revenue recognition and contract terms could change our results?
What capacity, capital, and financing will we need?
How concentrated will our revenue become?
Which materials may qualify for exemption, and what documentation do we need?
Do our systems and controls scale with the work?
Get Ahead of the Work, Not Behind It
Clark Schaefer Hackett works with manufacturers and contractors in Ohio and across the region, including those serving Ohio projects from neighboring states, on exactly these questions, from revenue recognition and audit readiness to state and local tax and growth planning.
If you’re pursuing or have just won data center work, our team can help you evaluate the contract, structure your accounting, and protect your margins before the first purchase order. Contact your CSH advisor to start the conversation.
This article is for general informational purposes only and does not constitute accounting, tax, or legal advice. Ohio’s data center tax policy is evolving, and the information above reflects conditions as of the publication date. Consult a qualified advisor about your specific situation.
Written by: Emily Oceretko & Kerilyn Boergert
