West Virginia Wants To Use Data Centers To Eliminate Its Income Tax
West Virginia Governor Patrick Morrisey unveiled a new statewide plan to manage hyperscale data center development, aiming to revitalize the state's economy by using project revenues to reduce income tax. The plan seeks to address public concerns by holding developers and utilities responsible for infrastructure and energy needs, and requiring water-efficient designs. Despite local opposition, state regulators approved Fundamental Data LLC's initial hyperscale data center project in Tucker County.
West Virginia Governor Patrick Morrisey has introduced a comprehensive 20-year development framework, the West Virginia Responsible Data Center Development Plan, to proactively manage the expansion of hyperscale data centers across the state. The plan aims to stimulate economic growth and eventually eliminate the state's income tax by allocating 50 percent of data center revenues for this purpose. Additionally, 30 percent of project revenue will go to the host county, 10 percent to all counties, and the remaining 10 percent to statewide infrastructure improvements.
The framework addresses common public concerns by requiring data center developers and utilities to cover electrical infrastructure upgrades and procure sufficient power resources. It also mandates adherence to state environmental laws for water resources and actively recruits projects committed to water-efficient designs. These provisions are intended to assuage residents' worries, particularly in areas like Tucker County, where Fundamental Data LLC's proposed hyperscale data center has faced significant opposition, with residents claiming a lack of tangible benefits.
Despite ongoing opposition, state regulators recently allowed the Fundamental Data LLC project to proceed. While the Governor's plan avoids traditional tax breaks and statewide bans seen in other states, it introduces new administrative hurdles. The plan establishes a Data Center Advisory Council tasked with developing statewide standards for property setbacks, noise mitigation, aesthetic integration, and site security, raising concerns about potential bureaucratic bottlenecks. However, a positive aspect for property owners is the requirement that all project sites must be acquired through voluntary market transactions, preventing the use of eminent domain.