Virginia passed a two-year budget on 22 June that charges data centres $0.011 for every kilowatt-hour (kWh) they consume, including the power they generate themselves on site1. The Senate carried it 23 to 16 and the House 71 to 22. It is the first US levy to reach past the meter, taxing the same self-generated power the Department of Energy (DOE) ordered curtailed twice in 2026 in PJM territory.
The tax is capped at $600m a year and sunsets on 1 July 2028. To get there, lawmakers dropped the $35 to $45 per kilowatt backup-generator fee floated in mid-June and kept the sales-and-use exemption the Senate had wanted to end. Compass Datacenters, which walked away from two Virginia sites when the tax outlook was unclear, now has a number to plan around, even if it is a higher one.
Charging per kilowatt-hour consumed, rather than per kilowatt of generator nameplate, ties the levy to actual compute use, so it captures AI inference growth directly instead of capacity that may sit idle. For operators the squeeze now comes from three directions at once: the DOE can switch the on-site plant off, Virginia charges for what it produces, and the turbines that run it sit in a multi-year supply queue. The data-centre lobby says the levy will deter investment; the counter-view is that a known cost restarts projects that uncertainty had frozen.
