But the Senate Strips the Data Center Tax Break Next Year
by Steve Haner
The Senate and House of Delegates financial committees met on Sunday to approve competing sets of amendments to the next Virginia budget, neither proposing any general tax increases. The Senate version included modest tax reform: a small taxpayer rebate for this year and an increase in the income tax standard deduction. ย
The Senate, however, allows the existing sales tax exemption for the data center industry to expire at the end of 2026, which raises almost an additional $1 billion over the next two years. A portion of the sales tax is dedicated to transportation, and the extra sales tax money to be paid by the data centers is earmarked for public transit in Northern Virginia.ย ย ย
The full Senate and House are expected to pass their competing budget bills in the coming week, setting up the annual conference committee process to reconcile differences before the scheduled General Assembly adjournment on March 14. Because of the Senateโs move against the data centers and its proposed tax reforms, a contentious conference is possible.ย
Both budgets include an increase of the base legislative salary to $45,000 per year starting in 2028. Neither committee discussed the raises openly during their meetings, with the only mention coming when a Senate Republican spoke up to announce he would abstain on that individual item.ย ย












