Bill > SB1196

This bill modifies the sales and use tax exemption for data centers in Virginia by introducing new energy efficiency and renewable energy requirements. Specifically, starting July 1, 2025, data centers seeking tax exemptions must demonstrate either a power usage effectiveness (PUE) score of no more than 1.2 or, for data centers co-located in multi-use buildings, an energy efficiency level in the top 15% of similar buildings constructed in the previous five years. Additionally, by January 1, 2028, data centers must either procure 90% of their electricity from carbon-free renewable energy sources located within Virginia's transmission grid or derive their electricity from non-carbon-emitting renewable sources. The bill also prohibits qualifying data centers from using diesel fuel for onsite power generation after December 31, 2030. To maintain the tax exemption, data center operators must submit annual reports to the Virginia Economic Development Partnership Authority demonstrating compliance with these energy requirements, and the authority will establish guidelines for calculating PUE scores and comparing building energy efficiency. This legislation aims to incentivize more environmentally sustainable data center operations by linking tax benefits to improved energy efficiency and renewable energy usage.

Budget and Finance

https://lis.virginia.gov/bill-details/20251/SB1196