The Joint Subcommittee on Tax Policy was created in the 2021 Virginia Acts of Assembly, Special Session I, Chapter 552, to evaluate and make recommendations on potential changes to Virginia’s tax policies, including changes to tax brackets, tax rate, tax credits, and tax exemptions. Chapter 1, 2026 Acts of Assembly, Special Session I directed the Joint Subcommittee to review Virginia’s Data Center Sales and Use Tax Exemption during calendar year 2026.
Enabling Language
N.1. The Chair of the Senate Finance and Appropriations Committee shall appoint six members from the Senate Committee on Finance and Appropriations and the Chair of the House Appropriations Committee shall appoint three members from the House Committee on Appropriations and three members of the House Committee on Finance to a Joint Subcommittee on Tax Policy. The Joint Subcommittee shall elect a chairman and vice-chairman from among its membership.
2. The goals and objectives of the Joint Subcommittee shall include (i) evaluating the fiscal impact of amendments to tax brackets, tax rates, credits, deductions, and exemptions, as well as any other factors it deems relevant to making Virginia’s individual income tax system more fair and equitable; (ii) giving consideration to the fairness, certainty, convenience of payment, economy in collection, simplicity, neutrality, and economic efficiency of the Commonwealth’s tax policies and any changes thereto; and (iii) recommending whether the General Assembly should amend the Code of Virginia.
3. To assist the Joint Subcommittee, the Chair of the Joint Subcommittee may appoint a workgroup which includes the staff of the House Committee on Finance, the House Committee on Appropriations, the Senate Committee on Finance and Appropriations, and any other stakeholders deemed appropriate. All agencies of the Commonwealth shall provide technical assistance to the Joint Subcommittee, upon request.
4. The Joint Subcommittee shall explore efforts to modernize the Commonwealth’s income and sales and use taxes during the 2024 interim. The goals and objectives shall include: (i) evaluating existing sales and use tax exemptions; (ii) applying sales and use tax to digital goods and services, including transactions involving businesses; (iii) evaluating efforts to increase the progressivity of the income tax; (iv) and long-term revenue growth to maintain core government services.
5. The Joint Subcommittee on Tax Policy shall study the data center sales and use tax exemption and other data center impacts during the 2026 interim. The Joint Subcommittee shall meet at least two times with the following goals and objectives: (i) reviewing Virginia’s data center sales and use tax exemption; (ii) examining the impact of the existing and any potential future exemption or incentives; (iii) approaches taken in other states related to the data center industry including tax preferences, incentives, environmental standards and mitigation, moratoriums on incentives or location of new facilities, and sustainable development requirements; (iv) reviewing methods related to data center investment in non-urbanized areas of the Commonwealth; (v) reviewing the recommendations and options in the 2024 JLARC study on Data Centers in Virginia; (vi) reviewing the estimated direct and indirect economic benefits of data center investment in Virginia; (vii) reviewing the direct or indirect impacts on the environment and quality of life related to data center location and siting; (viii) evaluating the impact of Artificial Intelligence on employment; (ix) reviewing the State Corporation Commission reported data on electric service agreements, water usage, permitted generators; and (x) recommended mechanisms to provide direct revenue to the state from the data center industry. The Joint Subcommittee shall report recommendations to the General Assembly by December 15, 2026. All agencies of the Commonwealth, applicable utilities, and the Weldon Cooper Center for Public Service shall provide technical assistance to the Joint Subcommittee on Tax Policy.
Item 1, Chapter 1, 2026 Acts of Assembly, Special Session I
Members
House
Alex Askew
95th District
Terry Austin
37th District
Joseph McNamara
40th District
Richard Sullivan Jr.
6th District
Luke Torian
Vivian Watts
14th District
Senate
R. Creigh Deeds
11th District
Mamie E. Locke
23rd District
L. Louise Lucas
18th District
Mark D. Obenshain
2nd District
Todd E. Pillion
6th District
Scott A. Surovell
34th District
Meeting Schedule
No upcoming meetings.
Staff Contact
Staff support for the Joint Subcommittee on Tax Policy come from House Appropriations Committee staff, Senate Finance and Appropriations Committee staff, and all agencies of the Commonwealth as needed. House Appropriations Committee staff supporting the work of the Subcommittee is below.
Anne Oman
