West Virginia's outdated revenue models struggle to tax data centers
West Virginia is facing criticism for its outdated revenue models and tax breaks for data centers, potentially lagging behind Ohio and Kentucky, which are taking steps to reverse similar tax breaks. The state's legislature changed the distribution of revenue from data centers but did not alter the core tax code for these facilities, specifically regarding the reversal of tax breaks.
WOWK 13 News reported on the ongoing debate surrounding data center taxation in West Virginia, highlighting concerns that the state's decades-old revenue models are failing to capture adequate funds from multi-billion-dollar data center developments. This comes as neighboring states like Ohio and Kentucky, under Governors Mike DeWine and Andy Beshear respectively, are taking steps to reverse tax breaks for high-impact data centers.
In West Virginia, the Governor and the GOP majority in the Legislature did not make similar alterations to the state's tax code to reverse existing tax breaks. Instead of revisiting what some argue was a previous handout, originally intended for high technology facilities before data centers were even contemplated in the code, the Legislature focused on changing the distribution of revenue from data centers.
The new distribution allocates 50% for a statewide income tax reduction and maintains a sales tax exemption. Data centers in West Virginia currently have their servers and computers assessed at only 5% of their market value. Critics argue that with the scale of data center development in counties like Putnam and Mason, the state is missing a significant opportunity to negotiate properly and implement a more appropriate tax code.