Butch Goldi, QTS Executive Vice President of Sales - East Region May 25, 2018
The Impact of the Georgia HB696 Tax Bill
QTS joined industry leaders in the IT landscape to sponsor and steward groundbreaking tax legislation that will spur growth in the data center market. Passed by the General Assembly and signed into law by Governor Nathan Deal, HB 696 amends Georgia Code 48 to create tax incentives for the business that data centers conduct in the state. With implications for QTS’ existing Atlanta-Metro and Atlanta-Suwanee locations, as well as any future development, HB 696 is a keystone bill in the data center sphere.
What is HB 696?
Designed to achieve a number of key economic and business objectives, HB 696 is an ambitious bill for Georgia. It will build a tech and data infrastructure that enables fiber access to expand into rural areas, with the intent of pushing the economic benefits of the data industry beyond just metro areas. Its three-tiered investment system also encourages development in less densely-populated areas, with more rural counties requiring a lower investment threshold to achieve tax exemption.
Regardless of where a data center is located, a company can leverage the new tax exemptions by providing at least 20 high-quality jobs to the county and investing at least $100 million over a seven-year period. Once a provider meets that threshold, it will qualify for a sales and use tax exemption on equipment used within the data center. For those data centers already in-state, HB 696 recognizes their previous investment through a discretionary bond process.
What does HB 696 mean for QTS?
By providing significant tax breaks in return for certain investment requirements, HB 696 helps encourage growth opportunities for data center companies like QTS in Georgia, which lead to more opportunities for economic, infrastructure and employment expansion in communities across the state. As the leading provider of hyperscale and hybrid colocation in Georgia with 47% of the market share, QTS is well-positioned to leverage this new legislature to continue to drive innovation is this region. With existing investments in our Atlanta-Metro and Atlanta-Suwanee locations, under the bill’s new discretionary bond process, QTS is well positioned to offer increased opportunities and better economics for both existing customers and those looking to colocate in our Georgia locations.
HB 696 is the latest in a spate of tax bills created to encourage data center industry growth. Legislatures are recognizing that data centers can have an enormous impact on local economies by creating high-quality jobs and tax revenue without straining existing infrastructures. The U.S. Chamber reported last summer that data centers average $32.5 million in economic impact each year in the communities they are located in. Bills like HB 696 will help to expand that output beyond primarily metropolitan areas to neighborhoods where jobs are needed most.