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Energy Related Legislation in the 2026 General Assembly: Data Centers, Utility-Scale Solar and Battery Storage. In a conversation with VACo Deputy Director Katie Boyle, we learn about the proposal to end Virginia’s sales tax exemption on data center equipment, and how that has led to an impasse on negotiating the next two-year state budget slated to begin July 1st. We learn about this tax incentive for the industry to locate in the Commonwealth and the potential implications to Virginia and its counties for ending the exemption. We also discuss the impacts to counties on legislation regarding the siting of solar installations and battery storage that have passed and will now be considered by the Governor.
Where to find out more about topics covered in this episode
- VACo Analysis of the House and Senate Budgets
- Tax Policy – Sales and Use Tax Exemption for Data Centers
House: Requires data centers to meet certain environmental requirements to qualify for the exemption, beginning July 1, 2027. (Item 4-14 #2h)
Senate: Terminates the sales and use tax exemption, effective January 1, 2027. (Item 4-14 #4s)
- K-12 – Local Composite Index (LCI) – Senate adds the value of computer equipment and peripherals used in a data center to the calculation of the true value of real estate and public service corporations when calculating the LCI, beginning with the 2028-2030 biennium. (Item 125 #1s)
- Biennial Data Center Retail Sales and Use Tax Exemption Report – January 2, 2026
- Bills Mandating Statewide Standards for Solar Facilities Headed to the Governor – Virginia Association of Counties
- Bills to Make Utility-Scale Batteries a By-Right Use Headed to the Governor – Virginia Association of Counties
- UVA Utility-scale Solar and BESS Database
- VEDP Summary of Existing Data Center Sales and Use Tax Exemption
VACo Contacts: Joe Lerch, AICP and Katie Boyle