Virginia Lawmakers Deadlocked on Data Center Tax Incentive
Senate moves to end incentives while House seeks to preserve them with new rules.
April 24, 2026 – Virginia lawmakers remain divided over how to tax and regulate data centers after failing to reach agreement on a state budget that includes changes to a key industry tax incentive.
The dispute centers on the state’s data center retail sales and use tax exemption, which is set to run through 2035. The Senate proposed eliminating the incentive beginning Jan. 1, 2027, while the House moved to preserve it with new environmental and energy requirements.
The impasse has stalled budget negotiations for weeks and sent lawmakers back to Richmond for a special session on Thursday.
