KERRIGAN IN THE WASHINGTON TIMES: Virginia Should Not Tax Away its Data Center Advantage

By SBE Council at 16 June, 2026, 9:33 am

"However it is framed, the practical effect would reach far beyond one industry. A tax on digital infrastructure is a tax on everyone, including working families, local governments and small businesses in every corner of Virginia."

In a June 15 Washington Times Op-ed, SBE Council President & CEO Karen Kerrigan documents the state of Virginia's tech ecosystem growth - including its robust tech workforce and the small businesses that help fuel the Commonwealth's competitiveness when it comes to investment, innovation, and economic growth. However, efforts now taking place in the Virginia legislature place the state's economic future at risk. Specifically, some legislators in Richmond are pushing a roll back or other changes to Virginia's long-standing sales and use tax exemption for data centers, which switch the rules "midstream" and would have investment effects far beyond the tech industry. Kerrigan writes:

"If the state invites an industry to invest billions of dollars under one set of rules and expectations, then abruptly changes course after that investment arrives, business leaders in every sector will take notice. Certainty and trust matter. Long-term investment depends on both."

Moreover, the potential policy switch comes at a time when Virginia's business-friendly reputation is taking a hit and many other states are in the mode of continuous improvement - that is, providing tax and regulatory relief for businesses of all sizes:

"Changing the rules midstream also raises more concerns for Virginia's eroding business climate. Within one year, the state of Virginia fell from No. 1 on CNBC's Top States for Business to No. 4. Many pro-business states continue to cut taxes and modernize regulations, while Virginia's current inclination is to raise taxes and impose more mandates…Virginia now ranks 30th on the Tax Foundation's 2026 State Tax Competitiveness Index, and there is little talk in Richmond of tax relief, a major pain point for the state's small businesses."

Kerrigan urges Virginia state leaders to keep the Commonwealth focused on growth and competitiveness, as competition among the states is only intensifying. That means not only providing certainty for existing businesses by not raising taxes or imposing new costs, but also by working to strengthen the business environment by reducing tax and regulatory burdens. Read the full Op-Ed here.