Anatomy of a data center tax break

Let’s deep dive into Virginia’s data center tax breaks. Data center tax incentives are 80% of all economic incentives in Virginia. Since 2011 data centers have paid no sales and use tax in Virginia. This amounts to $2.7 billion in lost tax revenue. In 2024, the state’s main data center tax exemption equated to a loss of $1 billion in state tax revenue. An annual report from the state’s Joint Legislative Audit and Review Commission said that Virginia’s incentive spending on data centers is rising in proportion to capital investment. 

Governing | Virginia’s Data Center Tax Breaks Cost the State $1 Billion