Georgia lawmakers vowed to restrain tax breaks. But the governor’s veto saved a data-center break

ATLANTA (AP) — Georgia lawmakers vowed they were going to rein in tax breaks for businesses this year.

Their efforts came to nothing.

Gov. Brian Kemp on Tuesday vetoed a two-year pause in a sales tax exemption the state gives for building and equipping computer data centers, after an intensive lobbying effort to preserve the tax break.

Kemp’s veto shows how hard it is to root out established tax breaks, said lawmakers and national experts.

“Any time you create a carve-out in your tax code, you then create a self-interested lobby around it,” said Greg LeRoy, the executive director of Good Jobs First, a liberal-leaning group long skeptical of economic development incentives.

The Republican governor wrote that he was vetoing House Bill 1192 because businesses had already made plans for data centers using the exemption and that the “abrupt” July 1 freeze would undermine “the investments made by high-technology data center operators, customers, and other stakeholders in reliance on the recent extension, and inhibiting important infrastructure and job development.”

The dispute in Georgia mirrors fights in other states including Virginia, where the rising number of data centers is sparking a backlash, and in Arkansas, where lawmakers are moving to impose new restrictions on data centers that mine cryptocurrency.

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