UGA study finds 30% of Georgia data-center activity tied to sales-tax exemption; lawmakers, unions clash as repeal is proposed

Tommy Shepherd, an economist at the University of Georgia's Carl Vinson Institute of Government, told the Senate Finance Committee that a new econometric analysis attributes roughly 30% of the state's data-center activity to the state's sales-tax exemption for high-technology data centers.

The study, presented by Shepherd and introduced to the committee by Matt Teddle of the Department of Audits, estimated net foregone state revenue in 2025 at about $432,600,000, with a but-for-adjusted total of about 10,146 jobs and an estimated $1.25 billion in value added to the economy. Shepherd said the study's model produced a return of about $2.89 in economic activity for each dollar of foregone tax revenue and that additional tax revenue generated by related spending was roughly $41.5 million for the same period.

The committee and researchers discussed methodology and how the estimate had changed over time. "When we did the initial study in 2022 ... we used 90% because we had no Georgia data to work with at that time," Shepherd said. "Now we're using 30%. The 30% is based on a far more robust estimate using real world data that was not available 3 or 4 years ago." Matt Teddle, introducing the researchers, said the Department of Audits had released a revised summary but that the underlying UGA report had not changed.

Senator members pressed the presenters on job permanence and on how other incentives might shift company behavior. Shepherd said construction jobs can persist if a regional skilled workforce and supply chain develop, but individual projects have finite construction periods. Committee members noted that another sales-tax credit for large computer-equipment purchases could allow companies to shift where they claim benefits, a factor the presenters said the fiscal notes and pipeline approvals would affect.

Public testimony highlighted sharply different viewpoints. Labor representatives told the committee that repealing the exemption would cost thousands of well-paid construction and maintenance jobs. "We represent about 20,000 skilled craftsmen from all trades," said Kenny Mullins of the Atlanta North Georgia building trades. "Continuous jobs for Georgians ... we need to keep the successful tax credits in place and not change the sunset." Trey Kane of IBEW Local 613 said data centers support not just short-term construction but long-term maintenance jobs and urged the committee to "keep the existing tax credits in place."

Industry witnesses cautioned that abrupt repeal would undermine predictability. "Predictability is the most important factor for large scale capital projects," Dan DiOrio, vice president of state policy for the Data Center Coalition, said in opposition to repeal. DiOrio cited recent Virginia findings and warned that sudden changes could send projects to other states.

A development-authority speaker urged skepticism about projected property-tax benefits, saying appraisals and payment-in-lieu arrangements in some counties limit what local governments actually collect.

No committee action was taken on the repeal-style bill during this hearing. The committee chair and members said they would circulate fiscal notes and consider pipeline approvals and interactions with other credits before further action.

The committee heard the audit and UGA presentation, public testimony from unions and industry groups, and a development-authority critique; the matter will return to the committee for further consideration and review of fiscal notes.