Byliner: Virginia's data center tax exemption took about 60% of its incentive spending

Virginia's sales and use tax exemption on data center computer equipment and software accounted for about $4.1 billion of the $6.8 billion the state put toward economic development incentives from fiscal 2016 through 2025, according to a new report from the Joint Legislative Audit and Review Commission. Matt Busse covered the presentation to lawmakers. The exemption was an estimated $1.4 billion in fiscal 2025 alone, and it is 16 times bigger than the next-largest incentive, an income tax program for manufacturers. Reliable spending data on the exemption only goes back to fiscal 2021.

The return figures are the ones economic developers can expect to be asked about. JLARC found the state got 22 cents back in revenue for every $1 of the exemption, and 29 jobs per $1 million in forgone tax. Grants, just 16% of incentive spending, produced 131 jobs per $1 million and $1.29 in revenue per $1. The commission also lowered its estimate of how many data center location and expansion decisions the exemption drives, from 90% in earlier reports to about 50%. The analysis leaves out local revenue such as business personal property taxes, which JLARC analyst Ellen Miller said data centers "should be generating a good amount of revenue for the locality." Lawmakers debated the exemption during the last General Assembly session.

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Read: Cardinal News, "Report: Data centers dominate Virginia's economic development incentives"

Doña Ana County commissioners in New Mexico voted 4-0 Tuesday to issue a second notice of breach in a month to the developers of Project Jupiter, the Oracle-led data center campus the county approved in September 2025 with a $165 billion industrial revenue bond issue. Algernon D'Ammassa reports the problem this time is paperwork. A county spokesperson said the project missed an Oct. 31 deadline and has not provided a complete third-quarter jobs report. The first notice, a potential breach issued Oct. 27, followed Oracle's talks with El Paso Electric over backup power, which the commission chair said would violate the bond agreement unless it was amended.

The job counts in circulation don't line up neatly. On an October media tour, Stack Infrastructure put construction employment at nearly 4,400. After the vote, the company said it had more than 5,000 workers on site and was exceeding its job creation commitments. Oracle has said the finished campus will employ as many as 1,500 people, against a minimum of 750 committed to the county. The $165 billion is the expected investment over the bond's life and obligates no public funds, and it was not immediately clear what sanctions the county can impose. So far, the county's leverage comes from the quarterly and annual reporting schedule written into the bond agreement.

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Read: Albuquerque Journal, "Doña Ana County issues new breach notice to Project Jupiter developers"

Lee County supervisors and Mesabi Metallics have agreed on the local tax incentives and community payments for the company's planned $15 billion steel plant in southeast Iowa. Cami Koons went through the signed term sheet and county resolution. Mesabi would pay the county $50 million over 20 years in lieu of additional property taxes, and must guarantee at least $112 million in new assessed property value before it receives any tax rebate. Host-community payments of up to $10.5 million start at $250,000 when the term sheet is executed, then run $100,000 a quarter until construction begins and $375,000 a quarter during construction.

The county deal sits on top of up to $1.4 billion in state tax incentives that Iowa lawmakers approved in an October special session, and the local incentives are tied to the company meeting the Iowa Economic Development Authority's requirements. Mesabi has said the plant will employ at least 1,750 full-time workers and create around 6,000 construction jobs. Emily Benjamin of the Lee County Economic Development Group said the terms mean there is "no debt for the county." The structure, with a value floor ahead of any rebate and payments that begin before construction, is a template other host counties negotiating with a state-backed megaproject can compare against their own.

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Read: Iowa Capital Dispatch, "Lee County tax incentives for Mesabi Metallics plant approved by supervisors"