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Data Centers Win-Lose in Virginia by Gabrielle Gurley
Virginia got it done. State lawmakers skidded away from a nightmare of a potential government shutdown with a compromise that put the country’s first data center energy consumption tax on the table. The controversial sales and use tax exemption that saw the data centers pocketing $2 billion last year is still on the books, a not-so-insignificant victory for Gov. Abigail Spanberger (D) and House of Delegates leaders who preserved Virginia’s honor as a state forever “open for business.”
The bipartisan group of state senators who wanted the exemption eliminated had to make do with the consolation prize of imposing an electricity consumption tax on the centers, limited to $600 million each year of the two-year budget deal.
“That’s not nothing, right?” says state Sen. Danica Roem, one of the legislature’s leading data center opponents. The Democrat represents Prince William County, one of the Northern Virginia hot spots for data centers. For the past three years, she’s tried and failed to have data centers’ sales and use tax exemption repealed.
“I can go home and defend that to a point, while at the same time, my constituents are absolutely fed up with the idea that they have to pay sales tax, and the data center industry does not,” Roem says. “What is a multitrillion-dollar industry with individual multitrillion-dollar players? They should be paying their entire share.” She plans to have another tax exemption repeal on tap for 2027.
The two-year plan doesn’t answer the ultimate questions about how and when to tax data centers or the longer-term problems created by the facilities’ voracious energy consumption—usage issues have been historically passed on to residents, who end up paying the exorbitant rates.
The bipartisan group of state senators who wanted the exemption eliminated had to make do with the consolation prize of imposing an electricity consumption tax on the centers, limited to $600 million each year of the two-year budget deal.
“That’s not nothing, right?” says state Sen. Danica Roem, one of the legislature’s leading data center opponents. The Democrat represents Prince William County, one of the Northern Virginia hot spots for data centers. For the past three years, she’s tried and failed to have data centers’ sales and use tax exemption repealed.
“I can go home and defend that to a point, while at the same time, my constituents are absolutely fed up with the idea that they have to pay sales tax, and the data center industry does not,” Roem says. “What is a multitrillion-dollar industry with individual multitrillion-dollar players? They should be paying their entire share.” She plans to have another tax exemption repeal on tap for 2027.
The two-year plan doesn’t answer the ultimate questions about how and when to tax data centers or the longer-term problems created by the facilities’ voracious energy consumption—usage issues have been historically passed on to residents, who end up paying the exorbitant rates.
https://prospect.org/2026/07/06/data-centers-win-lose-in-virginia/]