Lawmakers reach agreement on Virginia’s 2026–2028 biennial budget
Virginia lawmakers have reached an agreement on the 2026-2028 biennial budget, which includes a new electricity consumption tax on data centers. The budget also mandates an impact study on the sales and use tax exemption currently enjoyed by data centers, resolving an impasse between the House and Senate.
Virginia lawmakers have reached an agreement on the state's 2026-2028 biennial budget, concluding weeks of disagreement over the taxation of the state's expanding data center industry. The proposed budget introduces a new electricity consumption tax for data centers, set at a cent and a tenth per kilowatt hour used monthly, which will be an additional charge to their current taxes and fees.
The impasse involved the Virginia Senate pushing to eliminate billions of dollars in existing tax breaks for data centers, while the Virginia House argued for their retention, citing job creation and tax revenue benefits. The compromise also directs a comprehensive impact study of the sales and use tax exemptions currently provided to data centers.
State lawmakers are scheduled to return to Richmond on Monday to cast their votes on the budget agreement.