Virginia—Sales and Use Tax Exemption: Investment and Job Creation Clarifications/Scenarios

Prior to claiming the exemption, any qualifying entity must enter into a memorandum of understanding with the Virginia Economic Development Partnership Authority ("VEDP").


A qualifying data center is a data center (1) that is located in a Virginia locality; (2) that on or after January 1, 2009, results in a new capital investment of at least $150 million; and (3) that on or after July 1, 2009, results in the creation of at least 50 new jobs associated with the operation or maintenance of the data center, provided that such jobs pay at least one and one-half times the prevailing average wage in that locality. (The jobs requirement is reduced to 25 new jobs if the data center is located in a locality that has an unemployment rate for the preceding year of at least 150% of the average statewide unemployment rate for such year or is located in an enterprise zone.)

A single entity makes a data center investment of $150 million, creates 50 jobs and enters into a memorandum of understanding with the Virginia Economic Development Partnership.

A single entity makes a data center investment of $150 million, signs agreements with tenants who contractually commit to create 50 jobs and submit verification of job creation through the single entity and the single entity enters into a memorandum of understanding with VEDP.

A number of tenants create a single entity, like a limited liability company (LLC), for the construction and operation of a data center, make a data center investment totaling $150 million, sign agreements with tenants who contractually commit to create 50 jobs and submit verification of job creation through the LLC, and the LLC enters into a memorandum of understanding with the VEDP as a single entity.