Virginia Becomes First US State to Tax Data Centers' Electricity Use — $0.011/kWh Levy Generating $600M/Year Effective July 1

Virginia's General Assembly passed a $205 billion biennial budget including the nation's first state-level electricity consumption tax on data centers, set at $0.011 per kilowatt-hour on all power consumed — grid, competitive retail, or self-generated. The levy takes effect July 1, is projected to collect $600 million annually, and refunds excess collections above that cap proportionally to operators; a 500 MW facility would owe roughly $48 million per year. Existing sales and use tax exemptions on data center equipment remain intact, but analysts note the tax represents a roughly 10% increase in effective electricity costs for the Northern Virginia 'Data Center Alley' market, the world's largest.