Demand for data center development opportunities remains at unprecedented levels across Virginia. But how the industry is regulated by Virginia’s diverse cities and counties is not uniform. 

In Northern Virginia, high data center demand combined with a diminishing supply of suitable sites has added complexity and uncertainty to the site acquisition and land use approvals process. In 2024, Loudoun County, Fairfax County and Prince William County have taken or are planning to take steps to increase taxes and/or amend zoning ordinances to impose additional regulations on the data center industry. As a result, more potential projects are subject to discretionary review in land use processes.

This trend is not uniform across the Commonwealth. Many localities are trying to attract and incentivize the data center industry, which is reflected in land use and tax policy.

McGuireWoods’ multidisciplinary data center team is well versed in the comparative differences and nuances in the tax and regulatory climate throughout Virginia. These analytics compliment the team’s legal, advocacy, energy policy and legislative experience. The firm regularly engages with trusted clients to develop strategies in markets outside Northern Virginia to strategically source opportunities, capitalize on available incentives, evaluate and manage risk, and secure successful outcomes.