In current media coverage, community benefits of data centers get far less attention than speculated costs. While local officials from Virginia to Illinois have proven the benefits with hard numbers, those benefits for state and local residents are now at risk due to a wave of proposed moratoriums on the construction of critical infrastructure like data centers and power plants.
The assumption that data centers are a drain on local resources has fueled this movement. But the receipts tell a different story. Data centers are some of the most reliable taxpayers a local government could have.
What Data Centers Actually Pay
Data centers generate tax revenue primarily through two channels: real property tax on the land and buildings, and personal property tax on the servers, cooling systems, and other equipment. Because that equipment is expensive, depreciates over time, and is replaced on a predictable cycle, a steady, growing stream of assessed value is created that most other commercial land uses simply can’t match.
Then, layer on state and local sales taxes, income taxes, and, in many jurisdictions, negotiated payments for community resources. A single large data center can provide massive local tax revenue – without requiring the local government to provide much in the way of public services or needed infrastructure. Many counties show that data center property taxes are large enough to enable new investments in the community while also lowering property tax rates on homeowners.
The Track Record: A Growing List of Receipts
The tax receipts from data centers speak for themselves.
Loudoun County, Virginia
Home to the world’s largest concentration of data centers, that revenue base has allowed the county to cut the residential real property tax rate every single year for a decade, while still fully funding schools, the Sheriff’s Office, and first responders. The county collected $895 million in real and personal property tax revenue from data centers in 2025 — more than 95% of the county’s entire operating budget.
A 2026 fiscal analysis from Mangum Economics, prepared for the Northern Virginia Technology Council, showed what would happen if you strip out data center revenue: the typical Loudoun homeowner’s property tax bill would need to rise by $5,800 a year, a 91% increase, just to maintain current service levels. Neighboring Culpeper County would see its residential property tax bills jump by 34% if it had no data centers.
Prince William County, Virginia
Next door, a similar pattern is playing out. According to an analysis, personal property tax revenue from data center equipment has risen 349% in Prince William County over the past 15 years, allowing the county to cut its real property tax rate, even as it has increased per-resident education spending by 82% over the same period.
New Albany, Ohio
Ohio’s approach exhibits the value of disciplined local negotiation. Since 2010, New Albany has attracted 40 data centers, each required to make minimum annual payments equivalent to what the site would generate if instead it were occupied by corporate offices or advanced manufacturing. A single facility generated $3.9 million in local tax revenue — equivalent to a company with a payroll above $165 million. This new revenue has helped the local school district avoid resorting to other means of increasing revenue or cutting costs. More broadly, the Ohio Chamber of Commerce Research Foundation found data centers delivered $1 billion in state and local tax revenue in 2024 alone.
DeKalb County, Illinois
In Illinois, DeKalb Mayor Cohen Barnes described how a Meta data center operating since 2023 let the city cut its local aggregate tax rate from 11.5% to 7.9% while adding $19 million a year to school funding. Moreover, the data center did not cause a spike in school enrollment or local infrastructure demand.
Myth: “Tax Breaks Mean Data Centers Don’t Really Pay”
The most common pushback on the benefits of data center tax revenue is that tax abatements, exemptions on sales tax for servers, or reduced assessment rates could reduce what data centers are actually contributing. It’s a fair concern, and while abatements vary from county to county, even fully accounting for exemptions, data centers still generate enormous net new local tax revenue that wouldn’t otherwise exist. In Virginia, even with sales tax exemptions in place, data centers were projected to generate over $1.3 billion in personal property tax on equipment in 2026 alone, accounting for 38% of Loudoun County’s total revenue.
Data centers just want the same sales tax treatment that a state grants for business machinery and equipment purchased in manufacturing and agriculture. Thirty-seven states have updated their sales tax law to exempt data center equipment in this way. So it is not a “tax incentive” that steers taxpayer dollars to a selected company or project.
A more honest policy conversation would be about how to structure incentives and abatements so they reward incremental investment without giving away more than necessary. Then the same standard should apply to any other large capital project a community competes to attract.
The Stakes for Residents
This is where the moratorium debate gets real for homeowners. A blanket ban doesn’t distinguish between a poorly negotiated project and one built on enforceable community commitments. Instead, both get blocked, eliminating the tax relief, school funding, and infrastructure investment that residents were counting on. When lawmakers impose moratoriums, the beneficiaries are other communities or other states eager to attract data center investment.
For homeowners in a place like Loudoun County, the alternative to data center revenue is a tax bill nearly double what they pay today. Policymakers weighing new restrictions on data centers should ask a simple question before they vote: what replaces this revenue, and how much will restrictions cost homeowners? The evidence from across the country suggests that hardworking Americans in local communities will suffer the most from a moratorium.