Virginia data center boon: Officials debate scrapping tax breaks

Virginia data center boon: Officials debate scrapping tax breaks

News ClipNBC4 Washington·VA·3/11/2026

Virginia lawmakers are debating whether to end a $1.6 billion annual tax break for the data center industry, which has led to a major data center boom in the state over the past 18 years. This has sparked opposition from industry groups who warn it could halt investment, while some lawmakers argue the tax break is no longer necessary. The debate comes amid growing national pushback on data centers and their impact on local communities.

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Virginia’s data center boom lowered taxes but changed neighborhoods. Now Maryland is weighing whether to follow its lead. News4’s Ted Oberg digs in. Nearly two decades ago, Virginia gave tech companies a tax break on equipment and software, and they began to build. The state became a data cen