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States’ Course Change on Tax Incentives for Data Centers

June 30, 2026 (1 min read)

States Alter Course on Data Center Tax Breaks

Virginia has become the latest state to pass legislation changing its stance on data center tax incentives in the face of growing opposition to the facilities over their potential impact on energy costs and availability. Last week lawmakers there approved a budget bill (HB 30) that provides for a data-center electricity consumption tax, while also keeping in place a sales and use tax exemption for such facilities that costs the state nearly $2 billion a year.

Lawmakers in at least 11 states, including Michigan (HB 5396), New Jersey (AB 5165/SB 4390), North Carolina (HB 1213) and Pennsylvania (HB 2650), have introduced legislation this year to limit or eliminate tax incentives for data centers, while Alabama (HB 399) and Washington (SB 6231) have enacted bills scaling back such incentives. (PLURIBUS NEWS)

—Compiled by SNCJ Managing Editor KOREY CLARK

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