(The Center Square) – Ten Republican senators are backing a bill that would end a sales-and-use tax credit for data centers.
Senate Bill 410, filed Thursday, would eliminate any new tax incentives but would not repeal any already in effect.
“Data centers should pay all of their taxes, electricity, water and other costs like everyone else,” said Sen. Chuck Hufstetler, R-Rome, in his weekly column. “The tax credit this year will cost Georgia taxpayers $625 million and is projected to grow even higher next year.”
Lawmakers attempted to put the breaks on the data center tax break in 2024. Gov. Brian Kemp vetoed a bill that would have paused the tax break for two years, saying it would undermine investment in projects already in development.
The bill’s other sponsors are Sens. John Albers, R-Roswell; Jason Anavitarte, R-Dallas; Matt Brass, R-Newnan; Greg Dolezal, R-Cumming; Kay Kirkpatrick, R-Marietta; Randy Robertson, R-Cataula; Shawn Still, R-Suwanee; Blake Tillery, R-Vidalia and Larry Walker III, R-Perry.
The Senate Special Committee on Eliminating Georgia’s Income Tax recommended looking at Georgia’s tax incentives as a way to recoup the $16 billion in revenue that would be lost if the income tax is halted.
Only 30% of Georgia’s data center boom can be attributed to a 2018 tax break intended to support the industry, according to a December report from the State Department of Audits and Accounts.
The report, conducted by the University of Georgia’s Carl Vinson Institute of Government, contradicted the university’s 2022 study that estimated 90% of Georgia’s data center activity was because of the tax break.
Researchers said their previous report lacked all the information required for an accurate analysis, including data from the Georgia Department of Revenue.
“…too few taxpayers had utilized the Georgia data center exemption to meet the IRS threshold for aggregation that is necessary to allow for publication of data,” researchers said in the report. Information for the 2022 report was sourced from data center websites, press releases announcing new projects, and industry representatives, they said.
Data centers are at the center of the debate over a plan that would add nearly 10,000 megawatts of capacity to Georgia Power. The utility said it would offset the cost to ratepayers with revenue from large-load customers, including data centers.
The Georgia Public Service Commission approved Georgia Power’s plan on Dec. 19. The Sierra Club, the Southern Environmental Law Center, and the Southern Alliance for Clean Energy are asking the commission to reconsider its decision.
