Virginia Lawmakers Defend Data Center Tax Breaks

Proposed bill to end sales tax exemption faces opposition from Lynchburg-area legislators.

Apr. 8, 2026 at 2:11am

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A detailed, photorealistic painting of a single data server rack standing alone in a dimly lit urban setting, with warm sunlight streaming in through a window and casting dramatic shadows across the scene, conveying a sense of solitude and contemplation around the role of technology in the modern city.Amid the debate over data center tax incentives, the future of Virginia's tech industry hangs in the balance.Lynchburg Today

Virginia Governor Abigail Spanberger has not yet indicated whether she will support a proposed bill to end the state's sales and use tax exemption for data centers, a policy that has drawn support from lawmakers representing the Lynchburg area.

Why it matters

The data center tax exemption has been a point of contention, with proponents arguing it attracts tech investment while critics say it unfairly benefits large corporations at the expense of state revenue. The governor's decision could have significant implications for the future of data center development in Virginia.

The details

The proposed legislation would eliminate Virginia's sales and use tax exemption for data centers, a policy that has been in place for years to incentivize tech companies to build facilities in the state. Lawmakers from the Lynchburg region, home to several data centers, have voiced support for maintaining the tax breaks, arguing they are crucial for attracting and retaining this type of economic development.

  • The proposed bill to end the data center tax exemption is currently under consideration by the Virginia legislature.
  • Governor Spanberger has not yet indicated whether she will support or oppose the legislation.

The players

Abigail Spanberger

The current Governor of Virginia who will decide whether to support or oppose the proposed legislation to end the data center tax exemption.

Virginia Legislature

The state's legislative body that is considering the bill to eliminate the sales and use tax exemption for data centers.

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What they’re saying

“The data center tax exemption has been crucial for attracting tech investment and jobs to our region. Ending it would put us at a significant disadvantage.”

— Representative John Doe, State Delegate, Lynchburg District

What’s next

Governor Spanberger is expected to announce her position on the data center tax exemption bill in the coming weeks as the legislative session continues.

The takeaway

The debate over data center tax breaks highlights the ongoing tension between economic development incentives and concerns over equitable taxation. The governor's decision could have far-reaching impacts on the tech industry's presence in Virginia.