LOUDOUN COUNTY, Va. (DC NEWS NOW) — Data show that tax revenue from data centers is growing steadily in both Fairfax and Loudoun counties.
Through a Freedom of Information Act request, DC News Now obtained tax revenue reports for Loudoun dating back to 2016 and for Fairfax dating back to 2018, the earliest years for which data is available.
In Loudoun, tax revenue from data centers totaled $663 million in 2022, a steady increase from 2016 when its total revenue was $146 million.
Data center tax revenue comes from three tax sources: Real estate, computer equipment and building fixtures. In Loudoun, computer equipment comprises the bulk of revenue and represented two-thirds of 2022 revenue.
Fairfax has only a fraction of Loudoun’s data centers and collected $20.28 million in revenue in 2022.
Loudoun County Data Center Revenue:
Loudoun’s data center revenue largely comes from assessments of computer equipment inside warehouses. During a July 13 Finance and Operations Committee meeting, county staff told Loudoun County Supervisors that the revenue source is challenging to forecast because the value of equipment can fluctuate.
Chair Phyllis Randall said that the county has incurred shortfalls in revenue projections twice, pointing to companies not replenishing their equipment after the COVID pandemic.
“If you don’t replenish the equipment, then it’s going to be valued less,” Randall said, also pointing to uncertainties of the power grid’s capacity.
Staff is recommending that the board create a stabilization fund to account for shortfalls.
“A miss in that forecast has significant impacts on operations,” said Megan Bourke, a county administrator.
Bourke said that planned projects would add an additional 24 million square feet of data centers over the next eight years. If those projects come to fruition, data center revenue in the county could topple $1 billion.
As county boards juggle fluctuations in revenue, communities across Northern Virginia face controversial projects that residents say encroach on their homes.
A proposed data center in Fairfax along Route 50 is drawing sharp criticism from both community members and airport officials.
Community member Cynthia Shang said that the proposed center would tower over her neighborhood, spurring concerns over its potential ecological impact and noisiness.
“The biggest concern to me is that no one is listening to us when we explain how negatively it will impact us,” Shang said. “We are a community that gets a lot of noise from the airplanes and rt. 50. And because of that, the perception is ‘Oh, what’s a little more noise for them?’
In a letter to county officials dated June 27, 2023, Gregg Wollard of the Washington Metropolitan Airport Authority (WMAA) indicated that the proposed building would come within several feet of critical air navigation surface surrounding Dulles International Airport.
In Prince William County, the board is weighing major zoning changes to accommodate the Digital Gateway project with QTS Realty Trust and Compass Datacenters, requiring alteration of zoning laws in its rural crescent. The board is set to vote on a measure in November.