Hassan and Senate Finance colleagues question Meta's use of research tax credits for AI data centers
In a letter to CEO Mark Zuckerberg, U.S. Sen. Maggie Hassan and other Senate Finance Committee members said Meta may be misusing a federal research credit to subsidize its AI data center buildout. They asked the company to answer by Oct. 31.
U.S. Sen. Maggie Hassan, D-N.H., and other members of the Senate Finance Committee asked Meta on Wednesday to justify its use of billions of dollars in federal research and development tax credits to pay for its buildout of artificial intelligence data centers, calling it a potential misuse of the credit.
In a letter to Meta CEO Mark Zuckerberg, the senators cited news reports that the company told the Internal Revenue Service its AI data centers are experimental "pilot models" that qualify for the credit. Hassan's office said the credit is meant to encourage experimental research, not to expand established computing infrastructure.
"Subsidizing your A.I. data center build is not close to meeting this standard," the senators wrote.
According to the letter, Meta has said in regulatory filings that it used the credit to cut its federal income tax bill by $6.6 billion from 2023 through 2025, with its claims growing from $700 million in 2023 to $2 billion in 2024 and nearly $4 billion in 2025. Citing Joint Committee on Taxation estimates that the credit cost the government $32 billion in 2025, the senators said Meta alone would account for more than 10% of all research credits claimed in the U.S.
The senators also pointed to Meta's most recent annual report, which they said described "uncertain tax positions" tied to its research credits. They wrote that such use of the credit "merits further investigation."
The letter also raised Meta's claim that $4.1 billion in stock-based compensation for Zuckerberg should qualify for the credit, a position the senators said the IRS is challenging while seeking $355 million in back taxes.
The senators asked Meta to answer a series of questions by Oct. 31, including whether it consulted the accounting firm EY. The release did not include a response from Meta.
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