Taxes

In Loudoun County, Virginia—the heart of the largest data-center market in the world—the Board of Supervisors has lowered the real property tax rate from $1.145 per $100 of assessed value in 2016 to $0.805 in 2026 (Loudoun County). Virginia's legislative auditors found that data-center revenue made up 31% of Loudoun's total local revenue. County staff told them it let Loudoun and Prince William lower real estate tax rates and build reserve funds, let Henrico start an affordable housing trust fund, and helped Mecklenburg build new schools (JLARC).

The same pattern shows up far from Virginia. In Quincy, Washington, data centers make up about 54% of the school district's local tax base, and the tax rate on the bond that built a new high school fell from about $1.96 to under 90 cents per $1,000 of assessed value (KOMO News). CNN reports that about 30 data centers pay an estimated 57% of the town's property taxes (CNN). DeKalb, Illinois, publishes a table of Meta's property-tax payments by year and taxing body. For 2025, the city's table lists about $18.55 million for the school district and $2.42 million for the city.

Those are payments into local public budgets: taxable property adds another payer to the system that funds schools, roads and services.

How a larger tax base creates choices

A property-tax levy is the amount a public body collects. In DeKalb's explanation, the city spreads that levy across its assessed tax base. Adding taxable value allows the same levy to be collected at a lower rate.

The city reports that it used Meta-related revenue to lower its tax rate while also adding police officers and firefighters and investing in neighborhood roads and alleys. Its published example illustrates the relationship between a levy, assessed value and the rate charged.

That relationship gives local officials choices about services, investment and the burden shared by existing taxpayers. A household's bill also depends on its taxable property value and the levies of the different public bodies receiving a share.

Different taxes reach different budgets

Land and buildings are generally assessed as real property. Some jurisdictions also tax servers and other equipment as business personal property. Sales and use taxes apply to eligible purchases, such as equipment or construction materials.

These are separate categories. An exemption for qualifying equipment purchases changes the sales-tax treatment. A property-tax abatement changes what is owed on the covered property for a specified period. Neither term describes the whole revenue picture on its own.

The Tax Foundation's comparison of 12 jurisdictions models a $1 billion facility to show how those categories and valuation rules affect tax liabilities. It provides a framework for understanding the taxes a project may face.

DeKalb offers a concrete example of how incentives and payments can coexist. Alongside the city's payment table, Northern Public Radio reports that Meta received state exemptions and a local property-tax abatement covering more than half its bill for the first two decades. Those incentives sit alongside the school-district payments in the city's table.

A state exemption, a county agreement and school-district receipts belong to different parts of government. Naming each recipient makes it easier to see which budget receives new income and which public body approved an incentive.

Agreements can specify another route for payments

A payment in lieu of taxes, often shortened to PILOT, is an agreed payment made in place of the otherwise-applicable tax. Its amount, recipients and duration are written into the agreement.

The Dayton Daily News investigation of Ohio projects describes an enacted Jefferson Township AWS agreement with a 30-year, 100% real-property exemption and a PILOT equal to 20% of the taxes otherwise owed. It reports that those payments are distributed to Miami Trace Local Schools, Great Oaks Career Campuses and the township.

The same investigation explains tax-increment financing, or TIF. That arrangement directs revenue from increased property value into a designated fund for infrastructure, rather than through the ordinary distribution system. Reading the agreement shows which payments support general services, which support infrastructure and which go to schools.

An incentive's terms define what it does. The National Conference of State Legislatures' requirements table lists different investment, employment and duration conditions across state programs. Some include clawbacks—provisions to recover tax benefits when specified commitments are not met.

A model of where new revenue could go

West Virginia's Treasury illustrates the distribution rules for certified high-impact data centers using proposed projects. In its September 2026 analysis, it models full implementation of the $10 billion Penzance project in Berkeley County.

Under the report's valuation and levy assumptions, it projects about $62.4 million in annual property-tax revenue, including about $28.3 million for the county school board and $10.5 million for the county commission. These are modeled allocations assuming the project is fully in place for the fiscal 2027 budget.

The special distribution formula applies to the regular-levy increment above the property's base-year value. School excess and bond levies also affect the allocation. Following those rules explains how the report arrives at the school and county amounts.

That is a useful model for a public discussion: identify the taxable value, calculate the applicable taxes and show the recipients. DeKalb's payment table provides another part of the record—what a locality reports receiving once investment is on the tax rolls.

Follow the revenue over time

A campus may be built in phases. Equipment valuations can change as servers age or are replaced, and the tax treatment may change when an abatement ends. A year-by-year estimate connects those changes to the budgets that will receive the money.

Put the revenue schedule alongside planned spending on roads, utilities and public services. This gives residents and officials a picture of what the investment contributes and how the community intends to use it. Reported payments can then be compared with the forecast as the project develops.

Understanding a local proposal

Start with the executed incentive or PILOT agreement, the assessor's valuation rules and the county and school budget documents. Finance staff can explain the payment schedule and recipients; elected officials can explain the agreement and public spending decisions before them.

Five questions help connect the project to the public budget:

• Which property and purchases are taxable, exempted or abated, and for how long?
• What payments remain, and which public bodies receive them?
• How do construction phases, equipment valuation and the end of incentives affect the yearly estimate?
• What infrastructure and service costs accompany the project, and how are they funded?
• Where will actual payments and compliance with investment or job commitments be reported?

A clear accounting lets the community discuss what additional revenue could support. It follows the investment through the tax rules and agreements to the public budgets people use every day.