ATLANTA – The debate over the tax breaks that the data center industry has enjoyed in Georgia for the past six years has moved from the General Assembly to the governor's office.
During this year's session, the Legislature passed a bill that would suspend state sales tax exemptions for data center equipment purchases for two years to attract data centers to Georgia.
The measure would also study how the tax cuts impact the state's existing power grid and energy supply and make recommendations by June 30, 2026, on how to address the impacts. Therefore, a state commission consisting of 14 members will be established.
Environmentalists are urging Gov. Brian Kemp to sign the bill, while data center industry representatives are urging him to veto it. Kemp has until Tuesday, May 7, to sign or veto any legislation passed by the General Assembly this year.
Republican legislative leaders supported House Bill 1192, citing the need to slow the proliferation of data centers attracted to Georgia by tax breaks. Since the sales tax exemption was approved in 2018, well-known companies such as Microsoft, Meta, and Google have set up data center operations in the Peach State.
Supporters of the bill said the industry's rapid growth is straining the state's ability to provide enough power to power-hungry data centers. Georgia Power executives drove home this point when they said the industry accounts for 80% of the additional generation capacity the utility is seeking from the state Public Service Commission.
With this concern in mind, nine environmental groups, including the Georgia Environmental Agency, the Southern Environmental Law Center and the state chapter of the Sierra Club, sent a letter to Kemp late last month urging him to sign the bill. The letter raised concerns about how unchecked data center growth could impact household electricity bills.
“Georgia Power customers have already seen steady increases in their bills in recent years,” the letter states. “There is no guarantee that data centers alone can bear the burden of increased power demand.”
The letter went on to warn that increased demand for data center electricity will increase reliance on fossil fuels, worsen air quality and increase carbon emissions.
In addition to putting a strain on electricity, data centers also require large amounts of water to cool servers and other computing equipment, environmental groups wrote.
“By signing HB1192, we will advance reasonable steps to help Georgia understand and plan for the significant environmental and fiscal impacts that data centers have on our state,” the letter to the governor said. It is proposed.
But industry advocates argue that ending the tax cuts for the next two years would send the wrong message to an industry that relies on certainty and predictability.
Josh Levi, president of the Virginia-based Data Center Coalition, cited a recent PricewaterhouseCoopers report that found Georgia's data center industry provided 22,760 jobs in 2021.
“The sudden suspension of the High Tech Data Center Facility Tax Incentive Program in HB1192 will create significant uncertainty for the many data center projects planned and in active development across the state,” Levi said. .
“Furthermore, there is a risk that data center customers will move to more than 25 other states that maintain tax policies similar to the programs that HB 1192 halts.”
Supporters of the bill counter that the suspension of the sales tax exemption applies only to new data center projects, not those already in the planning stages.
This article is available through a news partnership with Capitol Beat, an initiative of the Georgia Foundation for Publishing and Education.