"The US state of Virginia forfeited $1.6 billion in tax revenue through datacenter exemptions in fiscal 2025 - up 118 percent on the prior year - as the AI-driven construction boom accelerates. Good Jobs First, a nonprofit promoting corporate and government accountability, warns these incentives have become essentially automatic. Virginia's qualification threshold requires just $150 million in capital investment and 50 new jobs, which is modest compared to the billions spent on today's hyperscale facilities. The exemptions cover retail sales and use taxes on computer equipment, software, and hardware purchases."
"Greg LeRoy, executive director at the nonprofit, said: "Like 35 other states, Virginia is losing control of its spending by enacting virtually automatic sales and use tax exemptions, and sometimes other subsidies, for datacenter building materials and equipment." Recipients may qualify for local property tax reductions on top, he added. Virginia has the highest datacenter count globally - more than 600 according to some estimates - equating to more than 10 percent of estimated global hyperscale capacity."
Virginia forfeited $1.6 billion in tax revenue through datacenter exemptions in fiscal 2025, a 118 percent increase from the prior year as AI-driven construction accelerates. The state’s qualification threshold requires $150 million in capital investment and 50 new jobs, while exemptions cover retail sales and use taxes on computer equipment, software, and hardware. Incentives have become effectively automatic and can be layered with local property tax reductions. Virginia hosts more than 600 datacenters, representing over 10 percent of estimated global hyperscale capacity. More than half of US states offer similar sales and use tax subsidies for datacenters.
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