Data Center Backlash Forces States to Rethink Generous Tax Break

Residents of Coweta County, Georgia, have mobilized significant opposition against "Project Sail," a proposed $17 billion data center campus spanning over 800 acres. Community members, wearing "Stop Project Sail" shirts, voiced concerns at a county commissioners' meeting regarding noise, water consumption, power usage, and the destruction of rural landscapes. The local outcry has influenced State Senator Matt Brass, a Republican who previously supported the data center tax exemption, to now lead efforts to repeal it. The legislative push to end the sales tax exemption for data centers in Georgia, outlined in Senate Bill 410, has passed the Senate and is currently under consideration by the House. This move is fueled by growing public discontent with data center impacts and a University of Georgia audit that projected $625 million in foregone tax revenue for the next fiscal year, while also suggesting 70% of data center construction would occur without the exemption. Lawmakers are debating whether to reallocate this potential revenue to income tax cuts or a property tax cap, facing a looming April 2 session deadline and the challenge of convincing Governor Brian Kemp, who vetoed a similar repeal in 2024. Simultaneously, the Coweta County commissioners are expected to vote on rezoning the proposed Project Sail site from rural conservation to industrial, a decision critical for the project's advancement. Data center developers like Prologis, the company behind Project Sail, argue for the economic benefits, citing $100 million in annual tax revenue for Coweta County and the creation of 270 full-time jobs. Industry advocates, including Dan Diorio of the Data Center Coalition, emphasize job creation and a stable property tax base, while unions, such as the Atlanta North Georgia Building Trades Council, warn of potential job losses if the tax incentive is removed earlier than its 2032 sunset date. Google, Amazon, Meta, Microsoft, QTS, and Switch are among the major tech companies that have established a significant presence in Georgia, benefiting from such incentives.