Virginia Lawmakers Approve $600 Million Data Center Power Tax to Break Budget Stalemate
Updated
Updated · POLITICO · Jun 22
Virginia Lawmakers Approve $600 Million Data Center Power Tax to Break Budget Stalemate
2 articles · Updated · POLITICO · Jun 22
Summary
$0.011 per kilowatt-hour — capped at $600 million a year — will be levied on Virginia data centers for two years under a budget deal lawmakers approved Monday.
The eleventh-hour agreement breaks a monthslong impasse and averts what would have been Virginia's first government shutdown, with Gov. Abigail Spanberger expected to sign or revise the broader $200 billion-plus budget.
The compromise keeps roughly $2 billion in annual data-center sales tax breaks through 2035, a key concession after Democrats split over whether ending them would breach commitments to the industry.
State agencies are also directed to phase in oversight of data-center noise and water use, including annual water reporting and possible restrictions in designated cooling-water-scarcity areas.
Industry groups blasted Virginia as an unreliable partner, while some Senate Republicans said the package is still too lenient — underscoring how sharply politics have turned against data-center expansion.