Virginia Adds Electricity Consumption Tax but Stops Short of Repealing Data Center Sales Tax Exemption

Short summary

Virginia's 2026–2028 budget imposes a new electricity consumption tax of $0.011/kWh on data centers, capped at $600M annually, effective July 2026 through June 2028. The bill preserves the existing sales tax exemption for qualifying data center equipment, which was nearly repealed. Operators, owners, and tenants must factor this additional cost into leases, operating agreements, and project financings.

• •Virginia imposes $0.011/kWh electricity consumption tax on data centers, capped at $600M/year
• •Existing data center sales tax exemption (DCSUT) preserved through 2035 despite repeal attempts
• •Tax applies to all data center operators regardless of exemption status; first collection in September 2026

Generated with AI, which can make mistakes.