Virginia Lawmakers Approve Two-Year Budget After Months of Debate over Data Center Taxes
The compromise preserves the sales tax exemption while adding a fee expected to generate $600 million a year from data centers.
- On Wednesday, the Virginia DOT approved a $28.5 billion infrastructure plan allocating funds for the next six fiscal years starting July 1, upgrading over 4,300 road, bridge, rail, transit, and bicycle and pedestrian paths.
- This infrastructure commitment follows a long-delayed $200 billion state budget agreement that cleared the General Assembly on Monday, ending a months-long standoff over data center tax policy.
- The two-year spending plan includes 4% raises for teachers and 3.5% for state employees, while a new energy consumption fee on data centers is expected to generate $600 million annually.
- With a June 30 deadline looming, the budget now heads to Gov. Abigail Spanberger for final action to prevent a partial government shutdown.
- The budget positions Virginia as a leader on data center regulations and establishes a recreational marijuana market with sales starting July 1, 2027, though Sen. Glen Sturtevant and other Republicans raised concerns about potential future tax increases.
28 Articles
28 Articles
Virginia Democrats Finalize Sweeping Budget Deal
By Rich Tucker via The Daily Signal | June 23, 2026 Virginia’s governing Democrats played let’s make a deal to pass a two-year budget that will take effect next week. The state lawmakers opted to maintain a tax break that encourages companies to build data centers in the commonwealth. They offset that by imposing a new tax on the energy that those centers will use.Gov. Abigail Spanberger is taking credit for the idea.“Importantly, this budget po…
Virginia slaps data centers with big new tax — but no climate rules
Virginia Gov. Abigail Spanberger and her fellow state Democrats romped to a governing trifecta last year, pledging to curtail rising electric bills and ensure power-hungry data centers pay their fair share without undermining the state’s clean energy transition. But the party now looks poised to fall short on those…
Virginia Democrats Come Together to Support $600 Million Tax Hike - Americans for Tax Reform
After months of negotiations, Virginia Democrats just came together to impose a $600 million tax hike on one of the commonwealth’s leading industries. The policy, which has come about as part of budget negotiations, is to impose a new electricity tax on data centers that is expected to raise up to $600 million annually. Governor Abigail Spanberger and Democrats in the legislature have spent months debating whether and how aggressively to target …
Billion-dollar data center tax break preserved in budget deal
Gov. Abigail Spanberger praised the compromise reached on data centers and took credit for her role in shaping it. The Virginia General Assembly passed a two-year budget on Monday that keeps intact a tax break that saved data center companies $1.6 billion in 2025, in a compromise deal that will also add a new tax on energy used by data centers. Senate Democrats led by State Sen. Louise Lucas (D-Portsmouth) had tried to end that tax break before…
Virginia Democrats Reach Final Agreement on New Budget
Virginia’s governing Democrats played let’s make a deal to pass a two-year budget that will take effect next week. The state lawmakers opted to maintain a tax break that encourages companies to build data centers in the commonwealth. They offset that by imposing a new tax on the energy that those centers will use. Gov. Abigail Spanberger is taking credit for the idea. “Importantly, this budget positions the commonwealth to be a national leader o…
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