Tax them

🚨 Virginia Just Approved a First-of-Its-Kind Data Center Power Tax On June 22, 2026, Virginia’s General Assembly passed a roughly $205–207 billion biennial budget that includes a new electricity consumption tax on data centers. Key details: ⚡ Tax rate: 1.1 cents per kWh of electricity consumed, calculated monthly ⚡ Effective: July 1, 2026 ⚡ Revenue cap: $600 million per year ($1.2 billion over the two-year budget cycle) ⚡ Any collections above the cap are refunded to operators on a pro-rata basis ⚡ Applies to qualifying data centers and is separate from existing taxes and fees The move is notable because it is being described as the first statewide electricity consumption tax specifically targeting data centers in the U.S. Why it matters Virginia is home to the world’s largest concentration of data centers, particularly in Northern Virginia. As AI workloads drive unprecedented power demand, policymakers have been wrestling with a difficult tradeoff: 📈 Preserve economic growth and investment 🔌 Address growing strain on the electric grid 💰 Ensure data centers contribute more toward infrastructure costs The tax emerged as a compromise after months of debate over Virginia’s massive data center sales-tax exemptions, estimated at $1.6–1.8+ billion annually. Instead of eliminating those incentives, lawmakers chose to: ✅ Keep the existing sales-tax exemption in place for now ✅ Add a new electricity consumption tax ✅ Launch a review of current data center tax incentives Bigger picture Virginia may be the first state to implement this approach, but it likely won’t be the last. As AI infrastructure expands and power demand surges nationwide, states are increasingly asking a fundamental question: Who pays for the grid upgrades needed to support the AI economy? Virginia’s answer: the data centers should contribute more directly through their electricity consumption. This could become a model other states closely watch over the next few years. 🚀⚡🏗️