The Georgia Senate has voted to suspend tax breaks for data centers while a special commission reviews grid capacity in the state.

The Senate this month voted 29-22 in favor of passing House Bill 1192, with five absentees. Capitol Beat notes 29 was the minimum number of votes needed to pass legislation in the 56-member chamber

Introduced in February, the bill suspends the issuance of any new sales and use tax certificates of exemption for data center projects in the state. This pause will run from July 1, 2024, to June 30, 2026.

The tax exemptions would still apply to data center contracts entered into before July 1, 2024.

The bill also creates a Special Commission on Data Center Energy Planning. The commission will review the existing grid and energy supply, and make recommendations around expanding grid capacity & transmission infrastructure and siting data centers. The commission shall submit a report of its findings and recommendations after the June 2026 date.

Republican Representatives John Carson, Charles Martin, and Shaw Blackmon sponsored the suspension bill. The bill passed through the Georgia House of Representatives in late February.

As with the Representative vote, the Senate vote was largely down party lines - with 28 Republicans voting in favor and 20 Democrats voting against.

Georgia has given data center operators an exemption from the state’s sales tax since 2018. Companies receive a tax break if they hit certain thresholds relating to investment and job creation. The exemptions were due to stay in place until 2028, but were subsequently extended to 2033.

“When you go out and recruit somebody to come to this state and promise them incentives … this bill seeks to pull out the rug from underneath these folks,” Sen. Derek Mallow, D-Savannah, said Thursday on the Senate floor. “That’s not the way to do business.”

However, Sen. John Albers, R-Roswell countered: “To say the rug would be pulled out of any business is a misrepresentation,” as the exemptions would continue to apply to already qualified facilities.

Atlanta is a major data center hub; companies including Microsoft, CoreSite, QTS, DataBank, Flexential Switch, DC Blox, Edged Energy, Stack, T5, Vantage, EdgeConneX, and others have campuses in operation or development in and around the area.

Colorado Senators seek to offer data center tax rebate

Meanwhile, Colorado is looking to introduce new legislation that would offer tax rebates for data center developers to lure more investment into the Centennial State.

SB24-085: Sales & Use Tax Rebate for Digital Asset Purchases was introduced to the Colorado Senate in January and is under consideration.

From 2026 until 2033, the bill would allow data center developers and operators to claim a rebate for “all state sales and use tax” paid for construction materials or data center equipment for an eligible data center.

An "eligible data center" would have to meet specified criteria around the number of jobs created, revenue generated, and amount of power used. The current version of the bill would require at least 20 jobs, at least $100 million in investment, and a minimum of 3MW in order to qualify.

The bill was introduced by Democrat Senator Janet Bucker and Representative Jennifer Lea Parenti. Democrat Senator Kevin Priola and Republican Representative Ron Weinberg are also listed as sponsors.

“I look at data centers as infrastructure. Any modern society needs ports and roads and bridges and rail and telecommunications fiber,” Sen. Priola told the Denver Post.

A fiscal note said the bill would decrease tax revenue by $9.6 million in FY 2026-27, with “larger impacts” expected for future years. Revenue could decrease by an estimated $39.9 million in the final year of FY 2033-34. The bill would increase state expenditures by $106,000 in FY 2025-26 and $267,000 in FY 2026-27, due to additional work created to review applications and claims.

The fiscal note also highlights there is “significant uncertainty” regarding data center development that could become eligible for sales and use tax refunds under the bill.

Companies with facilities in operation or development in Colorado include DataBank, Flexential, Novva, QTS, CoreSite, IPI, and Verizon.