Sinema: Virginia is chasing away the industry that built its economy

Virginia is currently grappling with a proposed policy change that could significantly impact its data center industry. Virginia Senate Finance Chair Louise Lucas has introduced legislation to completely eliminate the state’s sales and use tax exemption for data centers, a move that has already prompted a major developer to reassess its plans. According to the article, Brookfield-owned Compass Datacenters recently abandoned an 800-plus acre data center campus project in Prince William County, a decision attributed to the ongoing political debate over tax breaks.

The proposed legislative shift is reportedly influenced by a recent Washington Post poll revealing widespread public opposition to data center expansion among Virginians. While the Senate aims to remove the exemption, the House seeks to retain it with additional environmental standards, and Gov. Spanberger is attempting to broker a compromise. Former U.S. Senator Kyrsten Sinema, co-chair of the AI Infrastructure Coalition, argues that this backlash is built on "myths" and that data centers are vital for Virginia's economy, citing over 113,000 jobs annually and significant tax contributions, such as in Loudoun County where they generate nearly 45% of tax revenue while occupying only 3% of the land. Sinema also addresses concerns about electricity and water consumption, noting that data centers account for only 4% of America’s electricity demand and increasingly employ closed-loop cooling systems or use no water at all. She emphasizes that new data center contracts ensure these companies cover the full cost of the grid infrastructure.