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The Georgia House of Representatives has passed a bill that would call a temporary halt to a sales tax exemption the state has been using since 2018 to attract huge high-tech data centers.

House Bill 1192, which passed 96-71, would suspend the exemptions for two years while a newly formed commission studies the impact data centers are having on Georgia’s power grid.

The drain data centers are putting on the state’s electric supply was documented last month when executives from Georgia Power testified before the state Public Service Commission that 80% of the additional demand for electricity driving the utility to ask for a huge increase in generating capacity is due to data centers.

“This is an immense subsidy for an industry that takes up a tremendous amount of resources, power and water,” Rep. Shaw Blackmon, R-Bonaire, chairman of the House Ways and Means Committee, said on the House floor Tuesday.

The bill’s supporters stressed that suspending the tax exemption would not affect companies operating existing data centers.

“We’re not pulling the rug out from anybody that’s trying to be in business today,” said Rep. Chuck Martin, R-Alpharetta.

But opponents, including some lawmakers with data centers in their districts, argued that suspending a tax credit the General Assembly approved just six years ago and extended in 2022 to attract a fast-growing industry to Georgia would send the wrong message.

“We have signaled to this industry that Georgia is open for business,” said Rep. Matthew Gambill, R-Cartersville. Bartow County is home to a data center currently under construction that is expected to generate $44 million in tax revenue during the next 10 years.

“Please don’t change the game at midstream and say Georgia is closed to business,” Gambill said.

House Minority Whip Sam Park, D-Lawrenceville, said House Bill 1192 is one of the few pieces of legislation before the General Assembly that has drawn opposition from both business and labor. The Georgia Chamber of Commerce and the International Brotherhood of Electrical Workers oppose the bill.

“This bill is bad for business,” Park said. “It will kill thousands of jobs.”

The measure now heads to the Georgia Senate.