Virginia Becomes First State to Directly Tax Data Center Electricity Consumption
Virginia's state budget, effective July 1, 2026, establishes a consumption tax of $0.011 per kilowatt-hour on all electricity used by data centers, a first-of-its-kind measure among US states, according to Data Center Knowledge.
Legislative budget documents estimate the tax will generate roughly $600 million annually for Virginia's general fund over the next two years. Virginia hosts one of the largest concentrations of data centers in the country.
The move follows a broader national trend of states introducing tariffs or cost-allocation rules aimed at ensuring large electricity users, rather than residential ratepayers, cover the infrastructure costs their demand creates. More than 30 states have proposed or implemented similar large-load customer measures, per Spotlight PA reporting.
Separately, the Wisconsin Public Service Commission has already approved changes requiring large-load customers to cover the full cost of generation and grid infrastructure serving them, an approach other states are watching closely.
See how a change like this affects your own numbers with the reasons your electric bill is high.