MultiState Insider

Data Centers, Tax & Budgets

Virginia Lawmakers Pass 15 Data Center Bills as Tax Exemption Fight Looms

March 30, 2026 | Morgan Scarboro, Kim Miller

Virginia data center legislation took center stage in 2026, with lawmakers considering 61 bills as the state hosts the world's largest concentration of data centers. Of these bills, 15 have been sent to the governor's desk, while 46 will carry over to the 2027 session. The data center tax exemption Virginia currently provides, worth $1.6 billion annually, remains unresolved as the Senate seeks to eliminate it entirely while the House wants to tie it to environmental compliance. This budget standoff has delayed the state budget, with a special session scheduled for April 23rd to resolve the issue. New legislation shifts Virginia data center energy costs to high-demand users, requiring facilities using 25 MW or more to pay for increased generating capacity. The bills also establish voluntary demand flexibility programs and prevent those costs from being passed on to other customers. Data center siting restrictions Virginia passed this year include a new permit process for facilities using 100 MW or more, requiring sound assessments near homes and schools within 500 feet. Localities can also now require assessments of impacts on water resources, agriculture, and historic sites before approving projects.