ECONOMIC DEVELOPMENT & TAXATION

ECONOMIC DEVELOPMENT & TAXATION

 

PRINCIPLE:

The technology industry had a $113 billion economic impact on the state of Georgia, which accounts for nearly 17% of the state’s economy. It is vital that we sustain and cultivate this maturing industry to ensure Georgia’s economic success in the years ahead. Georgia should pursue tax and business policies that: promote statewide access to technology resources throughout the state, are both equitable and stimulating to the unique challenges of the industry, and encourage job growth and new business creation. As the digital economy continues to play a major role in our economic growth, congress should make sure there is a clear framework in place that prevents the potential for confusion or duplicative taxation.

  • TAG supports utilizing technology to bolster statewide economic development.
  • TAG supports the study of emerging technologies and the impact the technology industry can have on Georgia's economic development.
  • TAG supports business-friendly policies and tax incentives that promote the growth and development of technology companies and infrastructure throughout Georgia.
  • TAG supports legislation that will encourage the development, growth, recruitment and retention of technology companies.
  • TAG supports a tax system that is fair and equitable across all functions of business and services. 
  • TAG supports the continuation of R&D tax credits. 
  • TAG opposes legislation that would create discriminatory business practices against any organization or individual which could negatively impact the state.

DATA CENTER TAX INCENTIVES

ISSUE:

The data center industry is one of the fastest growing property types in the United States. As the world’s economy continues its affinity for, and its reliance upon, information and data through traditional, as well as “cloud” computing, the need for facilities to store and transmit the ever expanding universe of data will continue to grow.

It is vital for Georgia’s economy to revisit the incentives for data center companies to expand or locate to Georgia, as they provide highly skilled individuals and infrastructure needed for other companies to build upon. Nearly all Fortune 1000 companies utilize data centers for their operations. In addition, all levels of government are increasingly reliant upon speeding data, information, and communications to meet their mission.

Since 2005, 23 states have passed legislation to provide customized tax incentive programs for data centers. These states provide full or partial exemption of sales tax for various investment types. The exemptions include construction, mechanical and electrical equipment, cooling systems, power infrastructure, electricity, and backup fuel and are covered to varying degrees.

KEY POINTS TO KNOW:

  1. Data centers can be a significant source of new revenue.
  2. Data center development represents the most robust and economically resilient sector of the Information Age economy. They invest huge sums of money in initial investment and then, due to the fail-safe nature of their operations, they invest millions in “refreshing” their systems and servers on a 3-5 year cycle. 
  3. Data centers tend to group together in clusters, and it is likely that once a certain geography attracts big name users, others will follow.

WHAT TAG SUPPORTS:

TAG supports expanding the data center exemption by making the following adjustments to the tax code to provide the following benefits for data centers and its tenants:

  • Alleviate Georgia state sales tax on equipment purchased for data center operations.
  • Alleviate Georgia state sales tax electricity which is necessary and integral to data center operations, except local taxes paid for educational purposes.

UNMANNED AIRCRAFT SYSTEM (UAS)

ISSUE:

The FAA Modernization and Reform Act of 2012 requires the Federal
Aviation Administration to fully integrate unmanned aircraft into the national airspace and implement standards for unmanned aircraft system (UAS) operation. The FAA proposed draft rules for the operation of UAS in the national airspace on February 15, 2015. Pending implementation of the final regulations, the FAA has created two main exemption methods for use of UAS by public entities (Certificates of Authorization or Waiver, “COA”) and by commercial businesses (Section 333 Exemption). According to FAA guidelines, states have control to enact laws about issues which usually fall within state power, such as requiring warrants for drone surveillance, prohibiting the attachment of firearms to drones, and prohibiting the use of drones for voyeurism.

Georgia is a leading hub for technology research on the operation of and uses for unmanned aircraft systems (UAS). There are over 28 Section 333 Exemptions currently issued to companies located within the State of Georgia. CNN has been selected by the FAA as its sole partner to research the safe media and commercial use of UAS in urban areas. Partner to research and commercial use of UAS in urban areas.

WHAT TAG SUPPORTS:

TAG supports the development of federal regulations that encourage continued innovation in UAS technology while protecting individual safety and data privacy. TAG encourages state and local leaders to collaborate with the FAA in order to prevent a patchwork of conflicting ordinances and regulations, unnecessarily burdening UAS operators and stymying economic development.


 

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