Virginia proposals could alter taxation of data centers

(The Center Square) – A wide range of data center-related bills are on the table this legislative session as Virginia lawmakers review potential changes to tax policy, utility oversight, environmental reporting, and local approval requirements.

The proposals span multiple policy areas, including tax exemptions, utility cost recovery, water use disclosures, environmental monitoring, and land use authority.

Most of the measures remain in the earliest stages of the legislative process and are still pending in committee or subcommittee.

Several bills would revise how data centers are taxed. The commonwealths’ 570 data centers are most of any state.

Two proposals focus on changes to existing tax exemptions for data centers. House Bill 897 and House Bill 961 would tighten eligibility for the retail sales and use tax exemption, linking it to factors such as energy sourcing, backup power systems, and certain equipment upgrades.

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