Data center tax breaks, energy costs emerge as targets for Georgia lawmakers
With the General Assembly back in session, Georgia lawmakers have spent their first few days under the Gold Dome staking out issues they want to tackle.
While some Republicans want to get rid of the state’s income tax, some Democrats want to curb federal immigration agents’ tactics.
But there are issues members of both parties appear eager to address. Chief among them are data centers, the computer server-filled warehouses that are proliferating across the state.
The Peach State is now one of the country’s top data center markets and tech companies are eyeing huge swaths of land for their facilities, from rural Middle Georgia and Rome to more urban DeKalb County and the city of South Fulton.
Lately, however, many server farms are getting an icy reception from residents and their elected officials worried about their land, power and water consumption — plus the tax breaks Georgia offers to lure the facilities.
It’s anyone’s guess which bills, if any, will make it to Gov. Brian Kemp’s desk to be signed into law. Still, key lawmakers from both parties are weighing new and existing bills dealing with everything from the state’s data center tax incentives to their energy costs.
“For me, it ranks near the top of what we’re going to be doing,” said state Sen. Matt Brass, R-Newnan, whose district includes Coweta County and other areas eyed for data centers. Earlier this month, Brass proposed legislation that would end the sales tax exemptions Georgia offers certain data centers.
The Data Center Coalition, an industry trade association that counts Amazon, Google, Meta and other major firms among its members, says data centers provide a jolt to local economies and generate significant tax revenue — even after deducting the value of tax breaks.
Khara Boender, the director of state policy for the DCC, said the industry will work with stakeholders “to strike the right balance that maximizes benefit to Georgia taxpayers, protects against rate increases, and ensures data centers are a net positive for the state.”
Tax incentives
Since 2018, Georgia has offered certain data centers a break on their state and local taxes for construction materials, computer servers and other equipment. By reducing costs for data centers, the idea was more of them would come to Georgia.
That part has certainly happened — metro Atlanta was the country’s top market for data center leasing in 2024. Since then, new data center proposals have spread into counties far from the state capital.
The question is whether the tax revenue state and local governments are forfeiting is worth it.
A new University of Georgia audit found the state has already missed out on hundreds of millions of dollars in tax revenue because of the tax breaks. By 2030, the foregone revenue is projected to rise to roughly $867 million, UGA found.
The audit also estimated 70% of Georgia’s data center projects likely would have come to the Peach State even without the incentives.
State legislators already tried once to change the tax breaks. In 2024, the General Assembly passed a bill that would have paused the incentives for two years, but the measure was vetoed by Kemp.
This session, lawmakers appear poised to try to claw back the tax breaks again.
Senate Bill 410 proposed by Brass would repeal the incentives going forward, but still honor exemptions offered to facilities before the law takes effect.
No Democrats have signed on to the bill yet, but the measure already has 16 Republican sponsors including Senate Majority Leader Jason Anavitarte. Brass is also chair of the powerful Senate Rules Committee, which decides which bills make it to the Senate floor for a vote.
Whether Kemp will sign the bill, if it passes both chambers, is still an open question.
Kemp press secretary Carter Chapman declined to comment on that bill and other data center legislation, citing the governor’s office’s “practice not to comment on pending or proposed legislation.”
Energy costs
It’s no secret data centers use huge amounts of electricity — some require as much power as a small city. But will data center developers themselves pay for all the new power plants and grid infrastructure they need, or will residential ratepayers subsidize the build out?
With customers in Georgia and across the country frustrated by their power bills, it’s a question that’s gotten the attention of leaders from across the political spectrum. Earlier this month, President Donald Trump said his administration was working with major tech companies to ensure Americans don’t “pick up the tab” for data centers’ power needs.
Georgia’s largest electric utility, Georgia Power, has been at the center of the data center and “energy affordability” debate for years now.
The utility has a historic expansion of its power fleet underway, mostly to serve data centers. Late last month, regulators at the Public Service Commission approved the company’s plans to add 10,000 megawatts of new power resources in just five years.
Georgia Power and the PSC have taken steps they say will ensure residential customers don’t pay for it, such as new billing rules approved last year that allow the company to charge data centers more for power, among other guardrails.
Still, some consumer advocates and lawmakers think more protections are needed.
Last session, Sen. Chuck Hufstetler, R-Rome, introduced a measure, Senate Bill 34, some believe would do just that.
Instead of just allowing Georgia Power to bill data centers more, SB34 would require the utility to charge data centers for any costs “substantially related to” serving the facilities, or that “would not have been incurred” otherwise.
After passing out of committee, the bill stalled in Senate Rules last year, but is still alive this session because of the General Assembly’s biennial legislative cycle.
Hufstetler said he still believes the current rules are insufficient and plans to renew his push.
“I think the people of Georgia, by an overwhelming majority, want the protection in place,” Hufstetler said.
Brass, whose Rules committee held up the bill last session, also said he wants take another look at it this year.
Georgia Power opposed the bill in 2025, and the company’s spokesperson Jacob Hawkins said its position hasn’t changed. He said the current PSC rules already “shield families and small businesses from cost shifting.”
“Because those safeguards are in place, additional statutory requirements for a single class would be duplicative and could limit the commission’s ability to balance affordability, reliability and growth for all Georgians,” Hawkins said.
Chapman, Kemp’s spokesperson, noted a recent Kemp speech endorsing the PSC’s rules.
“They’re doing it by encouraging smart, locally-driven growth and investment, and ensuring large load customers pay more,” Kemp said.
A temporary pause?
Rep. Ruwa Romman, D-Duluth, who is running for governor, has introduced House Bill 1012, which would pause data center development statewide until March 1, 2027. So far, two other Democrats and one Republican, Rep. Jordan Ridley, R-Woodstock, have sponsored the legislation.
Romman said the pause would give “overwhelmed” local governments time to develop data center policies that benefit their communities.
“Once you build these, you can’t really take them back and you can’t really restore the land to what it used to be,” Romman said.
Bills that could require new data centers to install more water-efficient “closed loop” systems are also rumored, but no concrete proposals have emerged yet.
The legislative session is scheduled to conclude in early April.
About the Author
Drew Kann is a reporter at The Atlanta Journal-Constitution covering climate change and environmental issues. His passion is for stories that capture how humans are responding to a changing environment. He is a proud graduate of the University of Georgia and Northwestern University, and prior to joining the AJC, he held various roles at CNN.
