The Georgia Senate passed a bill Friday to cut off tax breaks for new data centers, capping a subsidy program that ballooned from $100 million to $2.5 billion in fiscal impact. The vote was 32-21, with all Democrats opposing.
Senate Bill 410, sponsored by Sen. Matt Brass, R-Newnan, would bar new data centers from receiving two equipment-related tax credits while grandfathering companies already enrolled. It also requires contracts between data centers and utilities to include language protecting residential customers from absorbing the energy costs of these massive facilities.
The bill now heads toward reconciliation with a similar measure that the Georgia House passed on Feb. 17.
According to Just the News, Georgia enacted the data center tax break in 2018 to lure the industry. A 2022 University of Georgia study estimated that 90% of the state's data center activity resulted from the incentive. That claim collapsed last December when the State Department of Audits and Accounts, through a study conducted by UGA's own Carl Vinson Institute of Government, found the real figure was 30%.
So 70% of Georgia's data center growth would have happened anyway. The state was paying billions to subsidize an industry that largely didn't need the subsidy to show up.
Sen. Chuck Hufstetler, R-Rome, laid out the fiscal escalation on the Senate floor:
"These data centers when the last bill was around and the last bill was voted on, was about $100 million. Now it's about $2.5 billion for these two credits. The money for the state portion that these data centers are getting is more than an entire month of the total income taxes that the state of Georgia collects."
From $100 million to $2.5 billion. That is not a rounding error. That is a program that metastasized while nobody was watching the books, justified by a university study that the university's own institute later debunked.
The tax credits are only half the problem. Data centers devour electricity. The Georgia Public Service Commission unanimously greenlighted a Georgia Power plan in December 2025 to add nearly 10,000 megawatts of generating capacity. Someone has to pay for that infrastructure, and the question of who has driven the sharpest debate in this fight.
Hufstetler originally proposed Senate Bill 34, which would have addressed the issue more directly through utility rate-making. That bill never reached a floor vote. Brass said it would have encroached on the Public Service Commission's authority, so SB 410 takes a different approach: requiring contract language between data centers and utilities that would, in Brass's words, ensure "ratepayers will not pay the tab, will not pay for the cost for upgrades in our infrastructure due to data centers."
Contract language. Not rate structures. Not binding caps. Contract language.
Hufstetler voted for the bill but made clear he considers the consumer protection inadequate:
"What it doesn't answer is when a 14 gigawatts of power are built, and this guy uses 100 megawatts and this guy uses 500 megawatts and they add up to less than five gigawatts, then who pays for the other nine gigawatts? There is no protection for the consumers in that situation."
That is the right question. Georgia Power has said it would ensure $556 million in annual revenue from large load customers when it files its next rate case in 2028, claiming this would put "downward pressure" on rates. But a promise to file something in a rate case two years from now is not a protection. It is a press release.
Every Senate Democrat voted against SB 410. Atlanta Democrat Elena Parent called it "embarrassing" and said the public was getting "a middle finger." She described the bill's protections as having "more holes than you could drive a truck through."
On the narrow question of whether the bill's consumer protections are weak, Parent has a point that even Hufstetler shares. But every Democrat voting no on a bill that ends $2.5 billion in corporate tax breaks tells you something about where the party's real loyalties lie. This is a caucus that routinely demands corporations "pay their fair share" and then votes to preserve a subsidy regime that hands data center companies more than an entire month of Georgia's income tax collections. The contradiction speaks for itself.
The Senate and House bills will need to be reconciled. The core question heading into that process is whether Georgia legislators will treat contract language as genuine consumer protection or acknowledge it for what it is: a gentler approach that avoids stepping on the Public Service Commission's toes at the possible expense of the families who pay the electric bill.
Ending the tax breaks is the right call. A program sold as a $100 million incentive that grew to $2.5 billion, justified by a study the state's own auditors contradicted, should have been shut down the moment those numbers came to light. The Georgia Senate acted on that front. Credit where it's due.
But killing a bad subsidy while leaving ratepayers exposed to billions in infrastructure costs is not reform. It is half the job. Georgia families deserve to know that when 14 gigawatts of power get built for data centers that use less than five, they are not the ones left holding the bill for the other nine.