Microsoft Reverses Stance on Tax Incentives for Atlanta Data Centers

Microsoft is reversing its stance on tax incentives for three data center projects in Metro Atlanta. The company had previously agreed to pay its own way, but now wants to unwind local tax incentive agreements it obtained for these projects.

The development authorities of Fulton and Douglas counties approved the property tax break incentives in recent years. Microsoft is working with both counties to roll back these incentives, which would affect data center projects in East Point, Palmetto, and Douglasville.

According to The Atlanta Journal-Constitution, it's unclear how these incentives will be rolled back. Develop Fulton told the AJC that it's coordinating with Microsoft on unwinding the existing transactions.

This move comes as Microsoft faces growing criticism from local governments, residents, and other tech companies as it expands its data center footprint across the country. Data centers have seen significant growth in the US, with inventory increasing 11% in the second quarter compared to the same period last year and 80% year-over-year.

At least 38 states offer some form of data center incentive program, but national pushback has led some states like Maine, Nebraska, and Washington to rescind their incentives. New York recently became the first state to issue a year-long moratorium on data center construction as officials develop new standards for future projects.

The Fulton County Board of Commissioners approved a nonbinding resolution opposing further tax breaks and financial incentives for data centers. Commissioner Bridget Thorne introduced the resolution, stating that property tax breaks shift revenue away from public safety, infrastructure, and other services, placing more burden on existing businesses.