Virginia Keeps Data Center Tax Breaks, Adds New Electricity Consumption Tax

• Virginia kept its sales and use tax exemption for qualifying data center equipment, preserving a key incentive for the industry.
• The state also enacted a new $0.011 per kWh tax on electricity used by data centers, effective July 1, 2026 through June 30, 2028.
• Annual revenue from the new electricity tax is capped at $600 million, with potential total collections of up to $1.2 billion over the biennium.
• Virginia does not exempt data center electricity from sales and use tax, unlike some other states.
• Data center operators should assess the tax’s effect on costs, contracts, and compliance.

Source: mondaq.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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