Virginia Senate Finance Committee

The Virginia Senate Finance and Appropriations Committee, chaired by Senator L. Louise Lucas, proposed the key revenue compromise in Virginia's 2026 data-centre fiscal standoff. On 16 June the committee proposed a tiered $35 to $45 per-kilowatt fee on data-centre diesel backup generators, the first levy of its kind in the United States to target installed fallback capacity rather than electricity consumed. The fee is projected to yield $582 million in FY2027 and $1.2 billion in FY2028 while preserving the existing $1.9 billion sales-tax exemption that the industry depends on.

The committee's role is to reconcile revenue and appropriations in the Upper Chamber of the Virginia General Assembly. Its proposal represents a Senate-side compromise: keep the exemption but attach a new fee to generators that sit idle most of the year and are rarely taxed. The House of Delegates and Governor Abigail Spanberger opposed early elimination of the exemption, but had not, as of 17 June, offered a counter-revenue mechanism. The Senate is scheduled to reconvene on 22 June; the 30 June fiscal deadline raises the prospect of a partial government shutdown if no agreement is reached.

Virginia hosts the world's largest concentration of data-centre capacity in Northern Virginia. The committee's generator-fee model, if enacted, could become a template for other states seeking to tax hyperscaler infrastructure without triggering investment flight.