Question posed to Microsoft CoPilot : How much tax revenue do data centers generate in Virginia? How is that revenue split between state and local government?

Answer: State tax revenue from data centers: ≈ $1.5 billion annually

The Northern Virginia Technology Council’s 2026 economic impact report finds that data centers contributed over $1.5 billion in annual state tax revenue in 2025.

This includes:

• Corporate income tax
• State sales/use taxes except the exempted equipment
• Individual income tax from data‑center employees
• Other state‑level business taxes

Local tax revenue: ≈ $1.3 billion (property taxes alone)

The same NVTC report finds about $1.3 billion in local property taxes in Northern Virginia alone, even after incentives.

Local revenue sources include:

• Machinery & tools tax (where applicable)
• Business personal property tax (servers, equipment)
• Real estate taxes
• Local sales/use taxes
• Local BPOL taxes (in some jurisdictions)

Loudoun and Prince William counties account for the overwhelming majority of this revenue.

Query: How would repeal affect Virginia’s competitiveness in attracting new data centers?

Core finding: Repeal would weaken Virginia’s competitive advantage in attracting future data‑center investment by removing a long‑standing incentive that companies rely on when planning multi‑billion‑dollar projects years in advance. …

Repeal would not kill Virginia’s data‑center industry—but it would meaningfully reduce the state’s ability to attract new investment. Every industry‑side source warns of reduced competitiveness, reduced capital inflow, and reduced long‑term tax revenue.

Query: Are supporters of repeal economic ignoramuses?

Supporters of repeal (e.g., Sen. Louise Lucas, Sen. Mamie Locke, some progressive caucus members) are not “economic ignoramuses.” They’re making a normative argument:

“The exemption is too expensive, and the state needs the money more than the industry needs the incentive.”

That’s a values argument, not an economic model.

Where their case gets shaky is when they make empirical claims that contradict the data.