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Researchers: sales‑tax exemptions and MITC show mixed economic returns; data centers partly attributable to exemption
Summary
University teams told the committee administrative and support services and other sales‑tax exemptions marginally stimulate activity; MITC and data‑center exemptions produced measurable but‑for shares (data centers ~30% attributable), while personal/laundry exemptions show stronger local economic multipliers for small firms.
Presenters from Georgia Southern and UGA described results for sales‑tax exemptions, the Manufacturer’s Investment Tax Credit (MITC) and the data‑center equipment exemption.
Ben McKay (Georgia Southern) summarized two projects: personal and laundry services exemptions and the trade‑in vehicle tax exemption. He said the personal/laundry exemption covers barbershops, salons, laundromats and related services and argued exemptions reduce double taxation and can support microbusinesses. "It really ends up having a fairly strong movement through the economy," McKay said of the personal/laundry exemption, reporting a modeled return of about $1.50 of value added per dollar foregone in that sector. For the trade‑in exemption McKay said the exemption prevents double taxation on traded vehicles and that the attributable impact on sales and jobs is small relative to the size of the auto market.
Greg Wilson (UGA) presented four buckets: administrative and support services, waste remediation services, MITC and the data‑center exemption. He reported estimated net foregone revenue and job impacts: administrative/support services foregone revenue ~ $1.14 billion supporting ~22,687 jobs (cost per job ~$50,196); MITC foregone ~$144 million supporting ~176 jobs (cost per job ~$816,000); and data‑center exemption foregone ~$432 million supporting ~10,000 jobs (cost per job ~$42,638). He stressed application of but‑for shares: "we attribute 30% of data center construction to this exemption," he said, adding that equipment and servers are often manufactured outside Georgia and much of the economic impact arises from construction activity.
Presenters emphasized data limitations: the MITC analysis was constrained by available utilization data and further county‑level or tiered breakdowns were requested by legislators. Committee members asked for more detailed data by county tier and for property‑tax interactions for data centers; UGA said representative site analyses indicated data centers still generate significant property tax revenue even with typical abatements.
Legislators did not adopt new policy at the session; they asked researchers and DOAA for follow‑up tables and additional county and donor breakdowns.
