Trending Now - Virginia Officials Consider Ending Tax Breaks for Data Centers

WHO:

Virginia senators

Republican state Sen. Mark Obenshain

Gov. Abigail Spanberger

Democratic Sen. L. Louise Lucas

Data Center Coalition

Amazon Data Services

International Brotherhood of Electrical Workers

Dorian Hargrave, Virginia-based electrical worker

WHAT:

Virginia senators voted to end a projected $1.6 billion annual tax break for data centers.

The tax break requires the industry to resume paying a minimum 5.3% sales tax.

The industry has invested more than $80 billion in Virginia and created thousands of jobs over the past two years.

The proposal won bipartisan support in the Senate, with 21 Democrats and seven Republicans voting for it.

Amazon Data Services bought land from George Washington University in northern Virginia for a data center.

WHERE:

Richmond, Virginia

Northern Virginia

WHEN:

The legislative session is set to end on March 12th, 2026.

The tax break proposal was discussed in March 2026.

The Data Center Coalition's statement was made in March 2026.

WHY:

There is a growing national pushback on data centers due to concerns over noise, power grid strain, and the impact of artificial intelligence on household electricity bills.

Gov. Abigail Spanberger expressed concern about "going back on Virginia’s commitments to businesses that have invested in the Commonwealth."

The tax would “effectively halt investment” from the industry, according to the Data Center Coalition.

HOW:

Tax breaks have been a regular perk for developers of data centers, allowing them to spend money tax-free on equipment and materials.

Lawmakers are negotiating the budget and have until March 12th, 2026, to agree on a spending plan.

(UPDATED March 11, 2026 17:20 UTC)

In a significant move, Virginia senators voted to end a projected $1.6 billion annual tax break for data centers, requiring the industry to resume paying a minimum 5.3% sales tax. This bipartisan proposal, which garnered support from 21 Democrats and seven Republicans, comes amid growing national concerns about the impact of data centers on noise, power grids, and household electricity bills. As lawmakers negotiate the budget ahead of the March 12 deadline, Governor Abigail Spanberger has voiced worries about the potential negative effects on businesses that have heavily invested in Virginia.