Hanover supervisors to consider raising tax rate on data center equipment

Hanover County, Virginia, is poised to reevaluate its special tax rate on data center equipment, with county supervisors scheduled to consider a significant increase at an upcoming June 24 public hearing and vote. The proposed rate could be set at up to $3 per $100 of assessed value, a substantial jump from the current $0.45 rate which was removed from the fiscal year 2027 budget for review. The county's decision to reassess the tax rate stems from a growing surge in data center development interest. Despite currently having no active data centers that have generated revenue from the special rate, developers have submitted at least five new zoning requests since 2023. Noteworthy projects include a 1,200-acre campus approved in 2024 and currently under construction by Denver-based developer Tract, which is also seeking approval for another 430-acre site. Other proposals involve LS Power for a 200-acre project and WestDulles, which filed a new request after a previous one was denied. Conversely, HHHunt withdrew a data center plan earlier this year. Hanover County officials emphasized the need to align the tax rate with current market conditions and the local service impacts of the rapidly expanding data center industry. The review also involves comparing Hanover's rates with neighboring counties like Chesterfield and Henrico, which levy similar special taxes on data center equipment, excluding real estate taxes on the buildings themselves.