It’s Time to End Data Centers’ Massive Tax Break - The Piedmont Environmental Council

This text was taken from an email alert sent out on March 27, 2026. Sign up for email alerts →

Protest against data center tax breaks — *Take a Minute to Write Your State Legislators and the Governor Before They Reconvene on April 23*.

Dear Supporter,

Should Virginia continue to give a $1.9 billion sales tax break to data centers and some of the wealthiest companies on earth? Or should Virginia collect that revenue and invest it back into communities?

This is the question at the heart of the Virginia General Assembly’s budget impasse. The Senate’s proposed state budget would phase out the sales tax break, while the House version keeps it in place.

Since 2008, this tax break has ballooned from $1.6 million to a staggering $1.9 billion annually — that’s Billion, with a B — roughly 6% of Virginia’s current annual state revenue.

While the incentive may have once served a purpose, Virginia is now the data center capital of the world and no longer needs the massive giveaway to attract companies like Amazon, Google and Microsoft to come to Virginia. In fact, we can no longer afford it. Our power grid is overwhelmed by the data centers already in operation, and tens of billions of dollars of transmission line projects planned to meet the exploding energy needs of data centers in the pipeline.

Legislators were unable to come to agreement about the budget before the end of the General Assembly but are scheduled to reconvene on April 23 to try to finalize it. Your delegate, senator and the governor need to hear from you today!

Take Action: Tell your Legislators and the Governor to End the Data Center Tax Subsidy

It only takes a few minutes to send a letter, but it will make a monumental difference in helping legislators and Governor Spanberger understand how important this issue is to you, their constituents!

Send Your Email

I also encourage you to set up a meeting with your legislators while they are back in their districts over the next few weeks to reiterate your desire for data centers to pay their fair share. Use the Who’s My Legislator? website to find contact info for your delegate and senator.

To that end, PEC and our partners at Clean Virginia have also created resources to help you coordinate, plan and participate in meetings. You’re invited to join our advocacy kick-off zoom call on Monday, March 30 at 6:30 p.m., to give you the information you need to conduct in-district meetings. Register for the call→

PEC supports eliminating, or substantially limiting the sales tax break on data center equipment. By eliminating or phasing out this exemption, the Senate’s proposed budget would redirect new revenue toward important needs in our communities, such as:

Funding critical water and wastewater infrastructure
Helping localities modernize aging school buildings
Expanding access to hunger relief programs
Improving transportation and transit across the Commonwealth
Providing direct taxpayer relief

Georgia and Arizona, and other states are actively taking steps to either eliminate or reduce their tax incentives for data centers, while Vermont, Oklahoma, Maryland, Georgia and New York are calling for moratoriums on data center development.

Large group at advocacy event. — More than 120 people attended this year’s Data Center Reform Lobby Day to meet with legislators and call for data center reform. Photo credit: Hugh Kenny.

Update on Data Center Reform Legislation

Earlier in this General Assembly session, PEC continued our hard push for meaningful guardrails on the unconstrained growth of this industry, a years-long effort alongside residents and partners.

While the Virginia Data Center Reform campaign forced legislators to recognize action is needed and the Senate took a strong stance on oversight and ratepayer protection, many of those protections failed to pass the House.

Below, we outline where PEC’s key data center bills stand:

Local Impact & Siting (HB153/SB94): Passed House & Senate, Awaiting Governor’s Action. This bill requires noise assessments and allows for additional local siting authority — a win for community protections.
Water Usage Transparency (SB553/HB496): Passed House & Senate, Awaiting Governor’s Action. After a back-and-forth “parry” between the House and Senate, a requirement for monthly reporting of water usage by operating data centers prevailed.
Emissions & Air Quality (HB507): Passed House & Senate, Awaiting Governor’s Action. (Amended). While the original language for a fossil fuel phase-out and some transparency was removed, the bill now requires backup generators to meet stronger Tier IV emission standards, which means less air pollution than the current Tier II standards.
State Oversight (SB619/HB155): FAILED. This would have required a “certificate of operation” from the State Corporation Commission for large-load customers.
Ratepayer Protection (SB339/HB658): FAILED. These bills aimed to ensure everyday ratepayers aren’t unfairly subsidizing the massive electrical infrastructure needed for data centers. These were carried over to 2027.

While the General Assembly Debates, the Unconstrained Data Center Onslaught Continues

Every month, Dominion Energy is currently receiving over one gigawatt (GW) of power requests from the data center sector – that’s enough to power about 250,000 homes.

In its most recent filing Dominion stated it had received 70 GWs in load requests — that’s three times the highest peak electrical demand ever recorded in Virginia. Even now, Dominion is struggling to meet a peak demand of 24 GW and has to import more than 36% of its energy supply from other states. It also plans to build new gas plants to help meet the need, contrary to the intent of the Virginia Clean Economy Act.

Meeting the 70 GW demand will require over $100 billion in new energy generation, transmission and substation infrastructure over the next decade. It will require $30 billion just for transmission lines, including the massive 114-mile, 765 kilovolt proposed transmission line we recently emailed you about. The cost of these projects is subsidized by Virginia ratepayers like you and me through our electric bills.

The estimated annual pollution increases in average PM2.5 (fine particle matter) attributable to the single Vantage data center with on-site power in Loudoun County. Map via PEC study.

You may have seen some headlines in recent weeks about data center proposals with on-site fossil fuel generation to avoid delays connecting to the grid. Because these “bring your own generation” projects often only require minor air permits, they frequently bypass rigorous state review and public input, despite being located near schools, parks, and residential neighborhoods.

A recent independent analysis commissioned by PEC of just one such facility in Loudoun County found that its on-site gas turbines and diesel generators could result in an estimated $53 to $99 million per year in health-related damages resulting from premature deaths and increased respiratory disease.

As more data centers propose these private power plants to circumvent grid constraints, the cumulative impact on our regional air quality poses a growing public health emergency that the state is currently failing to acknowledge. Learn more →

While the data center industry reaps the profits and enjoys massive tax breaks, Virginia families are left paying the cost through higher electric rates, degraded air, depleted water supply and direct impacts to our communities and shared public resources like our national parks [see the report recently released by our partners at the National Parks Conservation Association].

Please take a moment to send an email to your state delegate, state senator and Governor Spanberger today. Let them know that Virginia’s budget should prioritize people, not Big Tech profits.

End the Data Center Tax Subsidy

Thank you for joining friends, neighbors, family and coworkers across the state in the continued push for data center reform.