As the Virginia General Assembly enters its final weeks, several high-impact decisions are poised to shape the Commonwealth’s tech economy for years to come.

With two weeks remaining in the 2026 session, major budget and policy decisions are headed to conference. Below is a focused update on key developments impacting Virginia’s tech community.

⚡ Data Center Tax Policy (Major Flashpoint)

The most significant issue for our region remains the future of the Data Center Sales & Use Tax (DCSUT) exemption.

  • Current exemption runs through 2035
  • Senate: Ends exemption on Jan. 1, 2027
  • House: Extends to 2050 with added environmental/energy requirements
  • House leadership has publicly opposed eliminating the exemption
  • Gov. Spanberger has expressed skepticism but has not taken a firm position

This will be negotiated in conference and is the session’s largest business issue due to the potential long-term ripple effects on economic development in the Commonwealth.

💰 Virginia Budget & Tax Highlights

  • Proposals from both chambers would see Virginia stop following several federal tax provisions related to business interest deductions, R&D expensing, pass-through entity elections, and asset depreciation
  • The Senate budget includes one-time rebates; the House budget does not
  • The Senate budget increases the standard deduction; the House budget does not
  • Both chambers are looking at new non-traditional revenue streams. The House includes legalizing and taxing “skill games,” while the Senate proposes new taxes on cannabis and firearms/ammunition

💼 Labor & Workforce

  • Minimum wage increase to $15/hour passed both chambers
  • SB229 (civil class action lawsuits in state courts) passed
  • Increased funding for labor enforcement and paid family/medical leave startup
  • Teacher/state employee raises: 2% (House) / 3% (Senate)
  • Continued funding for workforce programs (FastForward, InternshipsVA, VCCS expansion)

🚇 Infrastructure

  • WMATA funding included in both budgets, though funding sources differ

🎰 Gaming & Cannabis

  • SB756 (Fairfax Casino) advancing in the House; if passed, would go to a Fairfax County voter referendum
  • Chambers remain divided on:
    • Recreational cannabis regulatory structure
    • Establishment of a consolidated gaming commission

Revenue from gaming and cannabis continues to factor into broader budget negotiations.

⏭ What’s Next

Major differences now move to conference committee, where final decisions will largely be negotiated behind closed doors.

The 2026 Session adjourns March 14. The General Assembly reconvenes April 22 to consider the Governor’s amendments and vetoes.

NVTC will continue monitoring developments closely and flagging issues with direct business impact. If these issues affect your organization, we welcome your perspective. Submit your inquiry here.