Virginia's datacenter tax breaks cost state $1.6B in 2025

Trillion-dollar internet giants don't need freebies, watchdog warns, as giveaways double in a year

The US state of Virginia forfeited $1.6 billion in tax revenue through datacenter exemptions in fiscal 2025 – up 118 percent on the prior year – as the AI-driven construction boom accelerates.

Good Jobs First, a nonprofit promoting corporate and government accountability, warns these incentives have become essentially automatic.

Virginia's qualification threshold requires just $150 million in capital investment and 50 new jobs, which is modest compared to the billions spent on today's hyperscale facilities. The exemptions cover retail sales and use taxes on computer equipment, software, and hardware purchases.

The disclosure is detailed in Virginia's Annual Comprehensive Financial Report [PDF], which covers the fiscal year ended June 30, 2025.

Good Jobs First claims the tax breaks are getting out of hand as the criteria to become a qualifying recipient are set at ...