• Date Due: October 01, 2025
  • Author: Department of Taxation
  • Enabling Authority: Code of Virginia - § 58.1-609.3 (18.c.)
  • Description:
    Biennial report on the sales and use tax exemption for data centers, including aggregate information on qualifying expenses claimed under this exemption, the total value of the tax benefit, a return on investment analysis that includes direct and indirect jobs created by data center investment, state and local tax revenues generated, and any other information the Department of Taxation and the Virginia Economic Development Partnership Authority deem appropriate to demonstrate the costs and benefits of the exemption.

    Received the following letter from James Savage, with the Virginia Department of Taxation, on September 3, 2025:

    The Honorable L. Louise Lucas, Chair, Senate Finance and Appropriations Committee

    The Honorable Luke E. Torian, Chair, House Appropriations Committee

    The Honorable Vivian E. Watts, Chair, House Finance Committee

    I am writing to provide notification that the biennial legislative report on the Retail Sales and Use Tax exemption for data centers under Virginia Code § 58.1- 609.3 (18) will be submitted by January 14, 2026, rather October 1, 2025. Under the memoranda of understanding (“MOUs”) that companies enter into with the Commonwealth, the deadline for submitting their post-performance reports to the Virginia Economic Development Partnership (“VEDP”) is October 1, 2025. The reason for the October 1, 2025 date is that it is standard VEDP practice to allow companies 90 days after the June 30 close of the reporting period to complete their post-performance reports.

    After receiving and confirming the Fiscal Year 2024 and Fiscal Year 2025 data submitted by October 1, 2025, VEDP and the Department of Taxation (“the Department”) conduct an extensive analysis of such data to prepare the biennial legislative report. As a result, both VEDP and the Department plan to submit the biennial legislative report by January 14, 2026. This will ensure that the information provided will enable both agencies to give the most comprehensive and thorough accounting of the total amount the Commonwealth foregoes in revenue under this exemption and to estimate and report on the assessed impacts.

    Please contact me at 804-371-2301 if you have any questions.

    Sincerely,

    /s/ James Savage

    Tax Legislation Director

    Virginia Department of Taxation