{"id":356,"date":"2026-07-06T09:09:17","date_gmt":"2026-07-06T09:09:17","guid":{"rendered":"https:\/\/frontierhousingreport.com\/?p=356"},"modified":"2026-07-06T09:09:17","modified_gmt":"2026-07-06T09:09:17","slug":"data-centers-win-lose-in-virginia","status":"publish","type":"post","link":"https:\/\/frontierhousingreport.com\/?p=356","title":{"rendered":"Data Centers Win-Lose in Virginia"},"content":{"rendered":"
\n
\n

Virginia got it done. State lawmakers skidded away from a nightmare of a potential government shutdown with a compromise that put the country\u2019s 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\u2019s honor as a state forever \u201copen for business.\u201d<\/p>\n

Read more Benjamin Franklin, Champion of the Wealth Tax<\/a><\/p>\n

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.<\/p>\n

More from Gabrielle Gurley<\/em><\/strong><\/p>\n

\u201cThat\u2019s not nothing, right?\u201d says state Sen. Danica Roem, one of the legislature\u2019s 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 For the past three years, she\u2019s tried and failed to have data centers\u2019 sales and use tax exemption repealed.<\/p>\n

\u201cI 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,\u201d Roem says. \u201cWhat is a multitrillion-dollar industry with individual multitrillion-dollar players? They should be paying their entire share.\u201d She plans to have another tax exemption repeal on tap for 2027.<\/p>\n

The two-year plan doesn\u2019t answer the ultimate questions about how and when to tax data centers or the longer-term problems created by the facilities\u2019 voracious energy consumption\u2014usage issues have been historically passed on to residents, who end up paying the exorbitant rates.<\/p>\n

Despite the bad-for-business complaints about taxes from the data center sector, its developers and operators will be unhindered\u2014in fact, fine. That alone might be enough to convince Virginia residents living in one of the world\u2019s largest data center markets of the absurdity of the proposition that\u2019s becoming clear with every new data center project\u2014the ones they know about as well as the ones that sneak up on them\u2014that it\u2019s a Big Tech world and residents are just living in it, the inverse of the way states and localities should operate.<\/p>\n

Virginia lawmakers are hyperconscious of tax revenues provided by the sector. Residents accepted the state\u2019s position until they began to connect the dots between that dominance and higher energy prices for residential ratepayers.<\/p>\n

Those lawmakers will soon find out that their data-centers-produce-revenues mindset comes with electoral consequences. \u201cIf you want to get elected, you better figure out how to be on the right side of this issue; there\u2019s no greenwashing or BS-ing,\u201d says Elena Schlossberg, executive director of the Coalition to Protect Prince William County, a local community advocacy group. \u201cYou\u2019ve got to pass the legislation, you\u2019ve got to be out there doing the right thing, and your votes are going to have to demonstrate that.\u201d<\/p>\n

AFTER A YEAR IN THE LEGISLATURE<\/strong> dominated by the data center taxation debate, the compromise almost seemed to come out of nowhere. It didn\u2019t. Once it became crystal clear that the Senate didn\u2019t have the support of the House and the governor for a wholesale repeal of the tax exemption, the compromise got new life.<\/p>\n

\u201cIt doesn\u2019t totally surprise me that there was some kind of compromise agreement worked out\u2014 just because nobody wanted a shutdown, but it is still just extremely disappointing,\u201d says Ben Verschoor, a leader of the Southwest Virginia Data Center Transparency Alliance.<\/p>\n

Virgina lawmakers returned to an earlier consumption tax proposal offered by the data center industry. Beginning on July 1, data center owners pay an electricity consumption tax at $0.11 per kilowatt-hour of electricity consumed per month at each data center. What the industry also wanted was a ten-year extension of the sales tax exemption, currently scheduled to expire in 2035. Lawmakers managed to bat that away.<\/p>\n

State senators wanted an immediate repeal of the exemption. They argue that residential taxpayers don\u2019t want to put up with subsidizing the tech giants as they watch their portfolios multiply in value. As the indomitable Sen. Louise Lucas, the 82-year-old president pro tempore of the Virginia Senate, put it to Spanberger last month: \u201cGovernor, read the damn room.\u201d<\/p>\n

Read more Marco Rubio\u2019s Dangerous Diplomacy in Lebanon<\/a><\/p>\n

\u201cShe really put her foot down and absolutely demanded that the data centers do something toward paying their fair share,\u201d says Roem.<\/p>\n

The data center electricity consumption tax caps state revenues at $600 million. Those monies go into the general fund. Any sum above and beyond that amount goes into a \u201cspecial, nonreverting fund,\u201d for refunds. The refunds aren\u2019t destined for residential ratepayers; they\u2019ll go to data center operators.<\/p>\n

The state does collect the interest on that amount, which will be deposited in the general fund. While $600 million annually is not nothing, it\u2019s not the same as the nearly $2 billion boost that the state would have hauled in last year if not for the sales tax exemption.<\/p>\n

For the data center sector, by comparison, the energy consumption tax was a bargain\u2014which is why the squawking from the sector wasn\u2019t too loud. Indeed, after the budget vote, Stack Infrastructure, a Denver-based data center developer and operator, announced that they intended to proceed with an AI data center project in Pittsylvania County, southwest of Richmond on the North Carolina border. For Roem, that decision illustrated that the industry really isn\u2019t worried about the consumption tax.<\/p>\n

State regulators are becoming more aggressive about reining in the sector\u2019s energy demands. At the end of last year, Virginia\u2019s State Corporation Commission (SCC), which regulates public utilities, insurance, state-chartered financial institutions, and other sectors, introduced a rate class exclusively for facilities 25 megawatts and higher, like data centers, that consume tremendous amounts of electricity. The SCC set the transmission and distribution that these customers must pay at 85 percent, and generation demand charges at 60 percent.<\/p>\n

Regulators also set aside the initial rate hike request from Dominion Energy, the state\u2019s largest power company and political bigfoot, that would have raised rates by nearly 25 percent in 2026 and a whopping 50 percent in 2027.<\/p>\n

Roem wants to see the legislature take a tougher stance on data center taxation. In addition to eliminating the sales tax exemption, she also supports a basket of fixes to level the playing field for residents, including a statewide moratorium, a law prohibiting by-right development, and restricting data center construction to areas zoned for industry.<\/p>\n

\u201cI had a bill in this year that would have required [Dominion] to pay 100 percent of the energy costs that they contract out for,\u201d says Roem. \u201cIf I had my way, I would just go hard in the paint on all this.\u201d<\/p>\n

Lawmakers in other states have already read the room and are trying to get out in front of voter anger about Big Tech, AI, and data centers. New York became the first to pass a statewide moratorium on the centers after Maine backed off one. Perhaps fearing a new state backlash, the data center developer in the middle of the controversy in Maine gave up on a data center proposal in the town of Jay after Gov. Janet Mills (D) had vetoed a ban and, in the process, helped doom her Senate bid by trying to protect the small-town project. Nearly a dozen other states have passed a moratorium or are studying one.<\/p>\n

In Utah, Republican primary voters ousted the longtime state Senate president, J. Stuart Adams (R-Layton), the force behind a colossal 40,000-square-foot data center proposal in Box Elder County, on track to be one of the largest in the world.<\/p>\n

The electoral consequences of data center sector expansion, tax credits, and more will be coming for Virginia state lawmakers, too. All the seats in the Senate and the House of Delegates will be up for grabs in 2027.<\/p>\n

Read more Who Is Running America\u2019s 250th Anniversary?<\/a><\/p>\n<\/div>\n


\n
\n
\n<\/article>\n","protected":false},"excerpt":{"rendered":"

Virginia lawmakers avoided a potential government shutdown with a compromise that put the country\u2019s first data center energy consumption tax on the table.<\/p>\n","protected":false},"author":1,"featured_media":355,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[175],"class_list":["post-356","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology","tag-tagged-abigail-spanberger-big-tech-cities-communities-danica-roem-data-centers-economic-policy-energy-the-environment-politics-state-legisl"],"yoast_head":"\nData Centers Win-Lose in Virginia - Frontier Housing Report<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/frontierhousingreport.com\/?p=356\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Data Centers Win-Lose in Virginia - Frontier Housing Report\" \/>\n<meta property=\"og:description\" content=\"Virginia lawmakers avoided a potential government shutdown with a compromise that put the country\u2019s first data center energy consumption tax on the table.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/frontierhousingreport.com\/?p=356\" \/>\n<meta property=\"og:site_name\" content=\"Frontier Housing Report\" \/>\n<meta property=\"article:published_time\" content=\"2026-07-06T09:09:17+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/?p=356#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/?p=356\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/#\\\/schema\\\/person\\\/13a8c63a4bd3b73600b541c1532fc247\"},\"headline\":\"Data Centers Win-Lose in Virginia\",\"datePublished\":\"2026-07-06T09:09:17+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/?p=356\"},\"wordCount\":1351,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/?p=356#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/frontierhousingreport.com\\\/wp-content\\\/uploads\\\/2026\\\/07\\\/9f968a3f87f3ed52d358c2cab2a5023f.webp\",\"keywords\":[\"Tagged: Abigail Spanberger,\u00a0Big Tech,\u00a0Cities & Communities,\u00a0Danica Roem,\u00a0data centers,\u00a0Economic Policy,\u00a0Energy & the Environment,\u00a0Politics,\u00a0state legislatures,\u00a0tax policy,\u00a0Virginia\"],\"articleSection\":[\"Technology\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/frontierhousingreport.com\\\/?p=356#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/?p=356\",\"url\":\"https:\\\/\\\/frontierhousingreport.com\\\/?p=356\",\"name\":\"Data Centers Win-Lose in Virginia - Frontier Housing Report\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/?p=356#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/?p=356#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/frontierhousingreport.com\\\/wp-content\\\/uploads\\\/2026\\\/07\\\/9f968a3f87f3ed52d358c2cab2a5023f.webp\",\"datePublished\":\"2026-07-06T09:09:17+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/#\\\/schema\\\/person\\\/13a8c63a4bd3b73600b541c1532fc247\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/?p=356#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/frontierhousingreport.com\\\/?p=356\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/?p=356#primaryimage\",\"url\":\"https:\\\/\\\/frontierhousingreport.com\\\/wp-content\\\/uploads\\\/2026\\\/07\\\/9f968a3f87f3ed52d358c2cab2a5023f.webp\",\"contentUrl\":\"https:\\\/\\\/frontierhousingreport.com\\\/wp-content\\\/uploads\\\/2026\\\/07\\\/9f968a3f87f3ed52d358c2cab2a5023f.webp\",\"width\":2000,\"height\":1333},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/?p=356#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/frontierhousingreport.com\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Data Centers Win-Lose in Virginia\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/#website\",\"url\":\"https:\\\/\\\/frontierhousingreport.com\\\/\",\"name\":\"Frontier Housing Report\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/frontierhousingreport.com\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/frontierhousingreport.com\\\/#\\\/schema\\\/person\\\/13a8c63a4bd3b73600b541c1532fc247\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"sameAs\":[\"http:\\\/\\\/frontierhousingreport.com\"],\"url\":\"https:\\\/\\\/frontierhousingreport.com\\\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Data Centers Win-Lose in Virginia - Frontier Housing Report","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/frontierhousingreport.com\/?p=356","og_locale":"en_US","og_type":"article","og_title":"Data Centers Win-Lose in Virginia - Frontier Housing Report","og_description":"Virginia lawmakers avoided a potential government shutdown with a compromise that put the country\u2019s first data center energy consumption tax on the table.","og_url":"https:\/\/frontierhousingreport.com\/?p=356","og_site_name":"Frontier Housing Report","article_published_time":"2026-07-06T09:09:17+00:00","author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/frontierhousingreport.com\/?p=356#article","isPartOf":{"@id":"https:\/\/frontierhousingreport.com\/?p=356"},"author":{"name":"admin","@id":"https:\/\/frontierhousingreport.com\/#\/schema\/person\/13a8c63a4bd3b73600b541c1532fc247"},"headline":"Data Centers Win-Lose in Virginia","datePublished":"2026-07-06T09:09:17+00:00","mainEntityOfPage":{"@id":"https:\/\/frontierhousingreport.com\/?p=356"},"wordCount":1351,"commentCount":0,"image":{"@id":"https:\/\/frontierhousingreport.com\/?p=356#primaryimage"},"thumbnailUrl":"https:\/\/frontierhousingreport.com\/wp-content\/uploads\/2026\/07\/9f968a3f87f3ed52d358c2cab2a5023f.webp","keywords":["Tagged: Abigail Spanberger,\u00a0Big Tech,\u00a0Cities & Communities,\u00a0Danica Roem,\u00a0data centers,\u00a0Economic Policy,\u00a0Energy & the Environment,\u00a0Politics,\u00a0state legislatures,\u00a0tax policy,\u00a0Virginia"],"articleSection":["Technology"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/frontierhousingreport.com\/?p=356#respond"]}]},{"@type":"WebPage","@id":"https:\/\/frontierhousingreport.com\/?p=356","url":"https:\/\/frontierhousingreport.com\/?p=356","name":"Data Centers Win-Lose in Virginia - Frontier Housing Report","isPartOf":{"@id":"https:\/\/frontierhousingreport.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/frontierhousingreport.com\/?p=356#primaryimage"},"image":{"@id":"https:\/\/frontierhousingreport.com\/?p=356#primaryimage"},"thumbnailUrl":"https:\/\/frontierhousingreport.com\/wp-content\/uploads\/2026\/07\/9f968a3f87f3ed52d358c2cab2a5023f.webp","datePublished":"2026-07-06T09:09:17+00:00","author":{"@id":"https:\/\/frontierhousingreport.com\/#\/schema\/person\/13a8c63a4bd3b73600b541c1532fc247"},"breadcrumb":{"@id":"https:\/\/frontierhousingreport.com\/?p=356#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/frontierhousingreport.com\/?p=356"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/frontierhousingreport.com\/?p=356#primaryimage","url":"https:\/\/frontierhousingreport.com\/wp-content\/uploads\/2026\/07\/9f968a3f87f3ed52d358c2cab2a5023f.webp","contentUrl":"https:\/\/frontierhousingreport.com\/wp-content\/uploads\/2026\/07\/9f968a3f87f3ed52d358c2cab2a5023f.webp","width":2000,"height":1333},{"@type":"BreadcrumbList","@id":"https:\/\/frontierhousingreport.com\/?p=356#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/frontierhousingreport.com\/"},{"@type":"ListItem","position":2,"name":"Data Centers Win-Lose in Virginia"}]},{"@type":"WebSite","@id":"https:\/\/frontierhousingreport.com\/#website","url":"https:\/\/frontierhousingreport.com\/","name":"Frontier Housing Report","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/frontierhousingreport.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/frontierhousingreport.com\/#\/schema\/person\/13a8c63a4bd3b73600b541c1532fc247","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g","caption":"admin"},"sameAs":["http:\/\/frontierhousingreport.com"],"url":"https:\/\/frontierhousingreport.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/frontierhousingreport.com\/index.php?rest_route=\/wp\/v2\/posts\/356","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/frontierhousingreport.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/frontierhousingreport.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/frontierhousingreport.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/frontierhousingreport.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=356"}],"version-history":[{"count":0,"href":"https:\/\/frontierhousingreport.com\/index.php?rest_route=\/wp\/v2\/posts\/356\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/frontierhousingreport.com\/index.php?rest_route=\/wp\/v2\/media\/355"}],"wp:attachment":[{"href":"https:\/\/frontierhousingreport.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/frontierhousingreport.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/frontierhousingreport.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}