TeraWulf Lake Mariner (Fluidstack) data center, Barker, New York

TeraWulf's Lake Mariner data center campus in the Town of Somerset, near Barker in Niagara County, New York, had 102 megawatts of AI computing capacity running for its tenant Fluidstack by early July 2026, with another 336 megawatts under construction. Niagara County says TeraWulf has not paid sales tax on equipment bought for the campus since 2022, and the county is preparing to sue.

TeraWulf completed its CB-3 building in early July 2026, meeting the conditions for $600 million of Google's credit support for Fluidstack's lease at the site, the company said. The first data hall of CB-4 has entered commissioning, with phased delivery expected in the second half of 2026, and CB-5 is due to begin phased delivery in early 2027. The campus began as a bitcoin mining operation before turning to artificial intelligence, and its 410-acre former coal plant site still has five cryptomining buildings.

The campus has 750 megawatts of power allocated from NYSEG and the New York Power Authority, 90 percent of it from hydropower, the Lockport Union-Sun & Journal reported in October 2025. The AI buildings' cooling fans are rated at 45 decibels, quieter than the cryptomining buildings, and town officials said there would be no room for further expansion once the latest buildings are complete.

The tax fight is local. TeraWulf says its purchases at Lake Mariner are exempt under a state law passed under Gov. George Pataki for internet data centers, which the company calls "an existing provision of New York tax law applicable to internet data center operations." County Manager Rick Updegrove disagrees. He says the exemption was meant for email and web hosting, not a facility like Lake Mariner. "Yahoo is not Lake Mariner," he said.

"The sales tax revenues would have a significant impact on our budget," Updegrove said. For every $10 million in equipment, the normal sales tax would be $800,000, split between state and local governments, and TeraWulf did not apply to the Niagara County Industrial Development Agency for incentives. John Kaehny of Reinvent Albany said such tax breaks are "ripe for abuse and rarely clawed back if misused."

The county hired the law firm Hodgson Russ to investigate, and in early August 2026 the Niagara County Legislature unanimously asked Gov. Kathy Hochul to order an independent audit of the exemption statewide. Updegrove wrote to the governor: "It is our position that Lake Mariner is clearly not an internet web hosting facility, as it relates to the intent of the original exemption." Hochul has said the state may act on the exemption next year, according to the county.

New buildings on the campus still need approval from the Town of Somerset's planning board and town board, which met jointly in October 2025 on an amendment to the campus's planned unit development district, a site plan and a special use permit, Supervisor Jeffrey Dewart said. Whether TeraWulf owes the tax will be settled by the state Department of Taxation and Finance, or in court, which the county says it has already authorized.