Incentive brief · Virginia

Virginia — what’s on the ground.

The data center capital. Biggest incentive program in the country. Actively contested in the SCC and the General Assembly.

DCRSUT annual exemption: $732M
New GS-5 rate class: >25 MW, 85% of demand
Active dockets: 3 large-load proceedings

The context

Northern Virginia, Loudoun, Prince William, Henrico

Virginia hosts the world's largest concentration of data centers and the largest single US incentive program for them. The Data Center Retail Sales and Use Tax Exemption (DCRSUT) waived $732 million in sales tax in the last JLARC audit. As of 2025, the landscape has started to tighten — the Virginia SCC approved a new GS-5 large-load rate class, Dominion is formalizing its load queue process, and the General Assembly has several active bills touching siting and tax policy.

DCRSUT annual exemption: $732M
New GS-5 rate class: >25 MW, 85% of demand
Active dockets: 3 large-load proceedings
Min DCRSUT capex: $150M

Live pressure

What’s actively moving in Virginia.

SCC-approved GS-5 rate class takes effect January 2027 — 14-year contracts at 85% of contracted T&D demand for loads >25 MW with >75% load factor
Dominion large-load queue process under SCC direction — formal 100 MW+ queue with 300 MW individual cap
General Assembly HB 1601/SB 911 clean-up bills amending DCRSUT eligibility
JLARC next audit cycle focuses on DC tax expenditure, likely 2026–2027

Programs

The incentives we ship against.

Every active Virginia program that affects data center economics. Thresholds, benefits, clawback exposure, and the practical notes our analysts rely on.

Data Center Retail Sales and Use Tax Exemption (DCRSUT)

Sales/use tax exemption

Threshold: $150M capex, 50 jobs, 150% of local average wage, certified locality
Benefit: Full state + local sales/use tax exemption on qualifying DC equipment purchases (~5.3% effective rate)
Clawback exposure: Partial — failure to sustain jobs or capex can trigger repayment. DCRSUT audits are selective but ongoing.
Cliffcenter notes: By far the biggest DC incentive in the country by dollar value. Eligibility is strict on wage floor (tied to local average); we maintain a current locality map.

Major Business Facility Job Tax Credit

Job creation tax credit

Threshold: 50 qualifying jobs in a 12-month period
Benefit: $1,000 non-refundable income tax credit per qualifying job
Clawback exposure: No
Cliffcenter notes: Stacks with DCRSUT on the job requirement side. Useful for operators with construction and ops headcount in-state.

Virginia Economic Development Partnership (VEDP) grants

Discretionary grants

Threshold: Negotiated case-by-case
Benefit: Capital grants, workforce training grants, infrastructure grants — typically 0.5%–3% of capex
Clawback exposure: Per grant agreement. VEDP grants typically require job creation and capital spend milestones with detailed compliance reporting.
Cliffcenter notes: Grant negotiation is relationship-heavy. We help structure the application and track compliance, not replace the government affairs conversation.

Machinery & Tools tax abatement (local)

Local property tax abatement

Threshold: By locality (Loudoun, Prince William, Henrico each have their own rates)
Benefit: Reduced assessment ratio on DC equipment
Clawback exposure: Per locality
Cliffcenter notes: Loudoun's DC-specific M&T rate is the model. Prince William and Henrico have adopted similar structures. We maintain a current rate schedule per locality.

Playbook

How we run a filing in this state.

Qualify against DCRSUT before LOI

The wage floor is the trap. Local average wage in Loudoun is different from Fauquier, and the 150% multiplier varies materially. We screen against the current wage tables as step 0 of any Virginia site evaluation.

Model the GS-5 obligation curve

The 14-year contract at 85% of contracted T&D demand is a long-dated commitment. We model the obligation curve against your realistic load profile and surface the break-even points.

Stack M&T abatement by locality

Loudoun, Prince William, Henrico, and Culpeper all have different M&T schedules. We produce per-locality M&T projections so site selection reflects the local tax math.

Track VEDP grant eligibility

VEDP discretionary grants can add 1–3% of capex to the incentive stack. We flag eligibility windows and help structure the negotiation memo.

Authority and limits

Where the authority lives — and where it doesn’t.

Virginia tax law limits DCRSUT to specific locality types and minimum investment thresholds. The SCC has quasi-legislative authority over the new GS-5 rate class. Multiple pending bills in the General Assembly could tighten eligibility; we monitor HB 1601 and SB 911 closely.

Warnings

Two risks we surface at kickoff.

SCC scrutiny is rising

Two high-profile SCC cases in 2025 questioned whether existing DC arrangements were passing costs to residential ratepayers. Expect intervention in any BTM or co-location structure.

General Assembly volatility

Two legislative sessions back-to-back have seen DCRSUT cleanup bills. The program is unlikely to disappear, but eligibility parameters are under active revision.

Other states

We publish a brief for every state we serve.

TexasERCOT, Oncor, CenterPoint, AEP Texas GeorgiaGeorgia Power, Southern Company territory ArizonaSRP, APS, TEP territory OhioAEP Ohio, FirstEnergy, Duke Ohio territory TennesseeTVA territory — Memphis, Nashville, Chattanooga, Knoxville IowaMidAmerican, Alliant, ITC Midwest — MISO territory CaliforniaCAISO territory — PG&E, SCE, SDG&E, LADWP, municipal systems PennsylvaniaPJM territory — PPL, PECO, Duquesne, West Penn Power WashingtonBPA territory — Puget Sound Energy, Avista, Seattle City Light

Virginia brief

Build the full Virginia stack on your project.

Send us your investment, MW, COD, and candidate counties. We return a ranked stack with the filings you should prioritize — end to end, in one week.

Start a Virginia screen Read the research