Advocates say Virginia data center tax doesn't go far enough
Virginia's recently approved state budget includes a new electricity use tax on data centers. Environmental advocates view it as a positive step but argue it doesn't adequately address the broader concerns tied to the industry's rapid growth and infrastructure costs. They advocate for data center companies to bear a greater share of future infrastructure expenses.
Virginia's new state budget, recently approved by the General Assembly, includes an electricity use tax on data centers. This measure has been acknowledged by environmental advocates, like Christopher Miller, president of the Piedmont Environmental Council, as a positive initial step in addressing the industry's impact.
However, Miller and the council contend that the tax, which is capped at $600 million, falls short of fully confronting the widespread challenges associated with the rapid expansion of data centers across Virginia. These concerns include immense increases in electricity demand, the need for new power generation facilities, transmission lines, and substations, and local impacts such as noise, air pollution, and competition for drinking water.
The Piedmont Environmental Council emphasizes that it does not oppose data center development entirely, but rather advocates for companies to assume more responsibility for the costs of future energy infrastructure expansion. Discussions on data center growth, electricity demand, and cost allocation are anticipated to resume later this year among state leaders. The Data Center Coalition of Virginia had not responded to requests for comment.