Data center tax incentive approved

A regional job creation authority that includes Wise County has now approved what will be Virginia’s lowest regional property tax rate on data center equipment.

That’s according to a Tuesday press release from the Lonesome Pine Regional Industrial Facilities Authority, which includes the counties of Wise, Dickenson, Lee and Scott along with the city of Norton.

The regional partnership will offer data centers a tax rate of 24 cents per $100 of value, with a favorable depreciation schedule.

“I am proud of the Lonesome Pine RIFA localities for taking the data center industry’s lead by implementing this critical competitiveness tool for our region,” Virginia Sen. Todd Pillion, R-Abingdon, said. The effort demonstrates a regional commitment to make Southwest Virginia a prime data center location, he added.

“Local tax rates are extremely important considerations for site selection due to the capital cost of equipment and frequency of server replacement,” said Del. Terry Kilgore, R-Gate City.

“The Lonesome Pine RIFA is pleased that its member localities have worked collaboratively to create a unified, equitable and competitive approach to the attraction of data centers to our region,” said Chair Mitzi Sykes.

The member localities will take final action during the spring by formally adopting the agreement through their annual budget processes.

The InvestSWVA organization worked with the regional authority to develop the tax classification. InvestSWVA’s Project Oasis study found that Southwest Virginia is well-positioned for data centers because of land availability, mine-based geothermal cooling opportunities unique to the region and workforce readiness and development.

The study found that six coalfield-region sites met the general requirements for a 36-megawatt data center and four other sites could accommodate a center of up to 10 megawatts. A large data center would result in more than 2,000 jobs created during construction, 40 direct and 59 additional permanent jobs, $233 million in economic activity during construction and more than $50 million in economic activity annually once operations begin.