Virginia has enacted a new tax on electricity consumed by data centers, set to take effect in July 2026. This tax, the first of its kind in the state, is projected to generate approximately $600 million annually. The legislation applies to electricity from utilities, competitive providers, and self-generated power, with a rate of $0.011 per kilowatt-hour. While data centers retain existing sales tax exemptions on equipment, this consumption tax aims to offset those benefits and address infrastructure costs, though questions remain about potential cost-shifting to other consumers. AI
IMPACT This tax could increase operational costs for data centers, potentially influencing future investment decisions and the location of AI infrastructure.
RANK_REASON State-level legislation impacting a major industry sector. [lever_c_demoted from significant: ic=1 ai=0.4]
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