Virginia's starting to question whether its giant tax breaks for data centers are such a good idea | Fortune

"Over the past 18 years, Virginia became the world's largest data hub. The debate taking place there comes as dozens of communities nationwide are fighting data centers in local zoning meetings, politicians are growing anxious about AI's effect on household electricity bills and lawmakers are considering reducing tax breaks - or scrapping them altogether."

"The state tax department says the industry has invested more than $80 billion in Virginia and created thousands of jobs over the past two years. Obenshain is not the only one concerned about taxing it. The Data Center Coalition, which represents tech giants, said the tax would 'effectively halt investment' from the industry."

"We have now left the 'NIMBY' phase: Not In My Backyard, and we've entered the 'banana' phase: Build Absolutely Nothing Anywhere Near Anything."

Virginia became the world's largest data hub over 18 years by offering tech companies tax breaks on equipment and software. The industry invested over $80 billion and created thousands of jobs, but rapid expansion strained the power grid and generated noise complaints from residents. As artificial intelligence boomed and communities nationwide began opposing data centers, Virginia senators voted to eliminate the tax break, requiring companies to pay a minimum 5.3% sales tax. The Data Center Coalition warns this will halt investment, while some lawmakers fear economic consequences. The proposal faces uncertain passage in the House amid Democratic disagreements and budget pressures.

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