Virginia Lawmakers Split over Future of Data Center Sales Tax Exemption

The two houses of Virginia’s legislature, the Senate and the House, have passed two competing budgets that call, respectively, for the removal and approval of an existing data center sales tax exemption.

 The Senate’s budget proposal calls for ending the exemption effective January 1, 2027, projecting that the move would generate an additional $317.1 million in revenue for fiscal year 2027. In contrast, the House budget maintains the exemption.

The Senate and the House will need to agree on a unified budget before it can be sent off to the state’s governor, Abigail Spanberger, for approval, leaving the fate of the sales tax exemption uncertain.

“When asked earlier today how strong my position is on eliminating the tax break for data centers; I asked if they would like to learn about the strength of the three types of steel we used at the shipyard,” said Virginia state senator Louise Lucas on X.