On June 22, the Virginia legislature approved its 2026 biennial budget, which includes a first-of-its-kind tax on electricity certain data centers consume (HB 30, Item 3-5.24#1c). The tax rate is $0.011 per KWh consumed each month, beginning on July 1, 2026. The tax will last only for a two-year period, and will sunset on July 1, 2028.
The definition of the term “data center” for purposes of this consumption tax carves out facilities “whose primary function is to facilitate the provision of internet access service, a communication service…. or any combination thereof.” Since data centers whose primary purpose is to provide internet access or Voice over Internet Protocol communication services do not appear to be subject to this tax, it would seem that the primary target of this tax is intended to be data centers that provide services for artificial intelligence.