FOR IMMEDIATE RELEASE
CONTACT: Amy Bacigalupo, Communications Manager
June 12, 2026
Richmond, VA — Clean Virginia today expressed concern over the House Appropriations Committee’s conference budget proposal, which fails to act on Virginia’s rapidly expanding data center tax exemption, despite broad bipartisan support for reform and mounting warnings about the industry’s rising costs to taxpayers and ratepayers.
“With 67% of Virginians supporting an end to special tax breaks for Big Tech data centers, the House conference budget is badly out of step with the public,” said Brennan Gilmore, Clean Virginia executive director. “What began as a narrowly targeted incentive has grown into around $1.9 billion in annual tax breaks that threaten to grow even larger in the years to come.”
Rather than advancing reform, the budget punts the issue to a study commission whose results are not due until November 2026 — even though a 2024 report commissioned by the General Assembly already thoroughly studied the industry’s impacts. House Appropriations Chair Delegate Luke Torian, who has vociferously defended the data center tax exemption, has received over $1.8 million in campaign contributions from tech, utility, real estate, and lobbying interests associated with the data center industry since 2020. The budget move follows the defeat of Senate Bills 339 and 619, which sought to protect Virginians from data center-driven costs and strengthen State Corporation Commission oversight, during the regular session.
A Tax Break That Has Spiraled Out of Control
When enacted in 2008, Virginia’s data center sales and use tax exemption was projected to cost approximately $1.5 million per year. According to state budget documents, it is now expected to cost around $1.9 billion in Fiscal Year 2025 alone — more than 80% of all state economic incentive spending, with no overall cap. Continued data center growth threatens to raise the total even higher in the coming years.
Other States Have Already Begun Taking Action
Washington state recently limited its exemption to first-time investments only. Ohio Republican Governor Mike DeWine paused his state’s data center tax exemption after projected losses approached $2 billion in 2025. Texas Republican Governor Greg Abbott has called to end certain data center incentives, and Illinois Democratic Governor JB Pritzker halted new state tax incentive agreements for data centers.
“States across the political spectrum recognize that these subsidies are unsustainable and that the public is demanding accountability,” Gilmore said. “Virginia remains the national epicenter of the data center industry, yet House leadership continues to avoid even the most basic reforms while the financial consequences for taxpayers and ratepayers grow larger every year.”
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Clean Virginia is a nonprofit advocacy organization dedicated to removing corporate money from Virginia politics and reforming utility regulation to put customers first. Learn more at cleanvirginia.org.