State & Local News
Virginia Lawmakers Debate Data Center Tax Break
March 13, 2026
Virginia state lawmakers remain deadlocked over a significant sales and use tax exemption for data centers valued between $1.6 billion and $1.8 billion. The state Senate proposes ending the tax break amid concerns over rising energy costs and public opposition, while the House of Delegates seeks to extend it with added restrictions. This impasse has delayed the state budget agreement beyond the legislative deadline, creating uncertainty for data center operators and related industry stakeholders.
- Why this matters: The outcome will directly impact procurement planning and investment decisions for data center infrastructure and related services in Virginia.
- Procurement professionals should anticipate potential changes in tax incentives affecting project cost structures and vendor negotiations.
- Industry stakeholders, including contractors and suppliers, may face shifts in demand depending on the final legislative resolution.
- Organizations engaged in Virginia data center projects should monitor legislative developments closely to adjust business strategies accordingly.
The Governor has also made clear that Virginia should not be going back on agreements it has signed with companies that have brought business investment and substantial economic development to the Commonwealth.
— Jack Bledsoe, Press Secretary for Governor Abigail Spanberger
Gov. Spanberger thinks our chicken isnβt cooked β then what is the Senate supposed to pluck out of our budget?
— L. Louise Lucas, Senate President Pro Tem
Itβs Friday β thank you for tuning in to POLITICOβs Power Switch. Iβm your host, Adam Aton.
— Adam Aton, Host of POLITICO's Power Switch
Agencies
Virginia State Government, Virginia Senate, Virginia House of Delegates, Office of Governor Abigail Spanberger, Environmental Protection Agency
Vendors
Data Center Coalition, GE Hitachi, Westinghouse, Amazon Web Services
Locations
Sources
- Virginia Divided Over Data Center Tax Break: States of Play · Bloomberg Government News · Mar 13
- Data center tax breaks split Virginia Democrats - POLITICO · Politico · Mar 13