State budget includes data center incentives
The Virginia General Assembly passed a new state budget that includes an electricity tax on data centers but preserves existing tax exemptions. This budget is expected to allow Stack Infrastructure's large data center project at the Southern Virginia Megasite in Pittsylvania County to proceed. The project is anticipated to create thousands of jobs and generate significant local revenue.
The Virginia General Assembly passed a $205 billion two-year budget, effective July 1, that includes a new electricity tax for data centers while maintaining existing tax exemptions. This compromise budget faced delays due to Senate Majority Leader Louise Lucas's efforts to end data center tax incentives.
Despite the new electricity fee, local leaders, including Pittsylvania County Economic Development Director Matt Rowe, expressed confidence that the budget's passage would allow Stack Infrastructure's proposed data infrastructure campus at the Southern Virginia Megasite in Berry Hill to proceed. The project, expected to feature AI data centers and potentially AI training facilities, is Virginia's largest-ever proposed economic development initiative. It is projected to create 2,500 full-time jobs, with an average annual salary of $80,000, and generate an estimated $3 billion in local revenues over 30 years. Full build-out is anticipated to take at least 15 years.
State Senator Tammy Mulchi of Mecklenburg County, representing the 9th Senate District which includes Danville and Pittsylvania County, voted against the overall budget, citing concerns about excessive spending and cuts to programs like GO TEC. However, Senator Mulchi clarified that her opposition was unrelated to the data center incentives, which she considered a positive aspect of the budget, acknowledging their importance for Pittsylvania County and Danville. The budget also includes incentive funding for other projects at Berry Hill and the Staunton River Industrial Park.