Clayton County Data Center Tax Break: Abatement, Bonds, Clawbacks

The Clayton County data center tax break actually comes in two pieces: a Georgia sales and use tax exemption on qualifying equipment, and a local property tax abatement negotiated through the Development Authority of Clayton County using a bond-for-title structure. Before either one matters to a new project, there is a gating issue to deal with. As of late 2025, the Board of Commissioners has a moratorium in place on all new data center applications in unincorporated Clayton County, extended through roughly late June 2026.¹

The Moratorium You Have to Clear First

In 2025, the Board of Commissioners approved Resolution 2025-193, pausing acceptance of applications for special land use permits, rezonings, land disturbance permits, building permits, licenses, and certificates of occupancy for new or expanding data centers in unincorporated Clayton County.² That initial pause ran through December 31, 2025. Before it expired, the Board passed Resolution 2025-271 extending it for another 180 days.¹

During the pause, the county is studying data center effects on resident health, safety, and welfare and may adopt new zoning rules before resuming applications. Projects inside incorporated municipalities such as Forest Park follow those cities’ own zoning and are not necessarily subject to the county moratorium. Confirm the current status with county staff before spending on site planning or applications.

The Georgia Sales and Use Tax Exemption

The larger incentive is a state exemption under O.C.G.A. § 48-8-3(68.1), which removes Georgia sales and use tax on qualifying data center equipment purchased between July 1, 2018, and December 31, 2031.³ At data center scale, the savings can run into tens of millions of dollars over the facility’s life.

Eligible equipment is defined broadly. Servers, routers, switches, and peripheral devices qualify, as does the supporting infrastructure that keeps those machines running: backup generators, air handling units, cooling towers, energy storage, power distribution units, switchgear, batteries, wiring, cabling, and conduit. The equipment must be used to maintain the facility’s physical or digital environment, protect equipment from threats, or deliver power, cooling, or telecom services to the data center.³ Real property does not qualify, and equipment leased out to a third party more than once cannot count toward the investment threshold.

To actually use the exemption at the register, the operator needs a certificate from the Georgia Department of Revenue. The Revenue Commissioner will not issue that certificate unless the data center shows it is more likely than not to hit the minimum investment threshold.³ Without the certificate, sellers collect sales tax normally.

How Much You Have to Invest and Hire

Georgia sets its thresholds by county population from the most recent decennial census.⁴ Clayton County’s 2020 population of roughly 297,700 puts it in the highest tier. A Clayton County data center has to meet both of the following inside any consecutive seven-year window before the exemption sunsets on December 31, 2031:

At least $250 million in aggregate expenditures on the design and construction of the facility and on qualifying equipment.³
At least 25 new quality jobs, each at 30 or more hours per week and paying at least 110 percent of the county’s average annual wage.⁵

You will see lower numbers quoted online. The $75 million and $25 million thresholds apply to mid-size and smaller counties.³ For Clayton, the floor is $250 million. A full-scale campus typically clears that in equipment alone.

The Property Tax Abatement

The second incentive is local and comes from the Development Authority of Clayton County rather than a statute. The usual mechanism is a bond-for-title arrangement. The Development Authority issues industrial development bonds and takes legal title to the project, then leases the property back to the operator. Because a government entity holds title during the lease term, the property sits outside standard ad valorem taxation.

In place of regular taxes, the operator makes payments in lieu of taxes, known as PILOT payments, to the local taxing bodies. The amount and schedule are negotiated. A common structure phases payments in: smaller amounts in the early years when capital spending is heaviest, stepping up annually until they reach something close to full value by the end of a ten-year lease. How steep the abatement runs depends on the jobs and capital the project brings.

On a campus in the billion-dollar range, the property tax savings over the first decade can rival or exceed the sales tax exemption.

What the Bond Deal Costs Upfront

The bond-for-title transaction is not free. The applicant covers all Authority expenses, including a minimum $35,000 Authority Counsel fee and the cost of a financial advisor.⁶ Those fees are owed whether or not the bond actually closes.

At closing, the Authority collects an issuance fee of one-eighth of one percent of the bond principal, with an annual fee at the same rate due each year on outstanding principal; the first year’s annual fee is collected at closing.⁶ On a $1 billion bond, that is $1.25 million just for issuance.

How to Apply

The two incentives run on separate tracks. The property tax abatement starts with a formal application and Letter of Intent submitted to the Development Authority through Invest Clayton. The package needs the project scope, the tax relief being requested, total anticipated investment, and financial projections validated by a certified public accountant. Plan on providing energy demand estimates, a construction timeline, and a payroll breakdown by salary range.

The Authority then conducts a feasibility review. If the board finds the project fits local economic goals, it issues an inducement resolution signaling intent to proceed. The abatement activates at bond closing and lease execution.

The sales tax piece is a separate filing with the Georgia Department of Revenue for an exemption certificate. The property tax piece is local; the sales tax piece is state. You pursue both.

Reporting and Clawbacks

Approval is not the finish line. Georgia requires annual reports through the Georgia Tax Center documenting quality job counts, expenditures, and customer activity.⁷ Within 60 days after the end of the seventh year following the exemption start date, the operator must file a final report listing every expenditure counted toward the investment threshold and the quality jobs created.³

Miss the threshold and the clawback is complete. The operator must repay every dollar of exempted or refunded sales tax, with interest from the date each tax would originally have been due, within 90 days of notification.³ The Commissioner may also require a surety bond of up to $20 million as a condition of issuing the exemption certificate.

Bond-for-title agreements carry their own clawback language. The Development Authority reviews annual compliance reports against the projections in the original application. Falling short does not automatically wipe out the abatement, but it can trigger additional PILOT payments that erode the savings. Clayton’s data center incentives are generous, and Georgia built them with real consequences for operators who take the break and miss their commitments.

1
Clayton County Government. Community and Economic Development
2
Clayton County Government. Clayton County Board of Commissioners Approves Moratorium on New Data Centers in Clayton County
3
Justia Law. Georgia Code 48-8-3 – Exemptions
4
Georgia Department of Revenue. Data Centers Sales and Use Tax Exemption – Aggregate Expenditures by County
5
Georgia Department of Audits and Accounts. Tax Incentive Evaluation
6
Invest Clayton. Application for Bond Financing
7
Georgia Department of Revenue. How to Submit the Data Center Annual Report