Chesterfield proposes using data center revenue to lower car taxes

The Chesterfield Board of Supervisors will vote Wednesday on a proposal to use tax money collected from data centers to reduce the car tax rate, a move the county says would give residents a direct financial benefit from the facilities.

The current car tax rate in the county is $3.25 for every $100 of assessed value. According to a county press release, the data center dollars could reduce it to as low as $1.79 following the full build-out of Google’s three planned campuses.

The decision would impact existing data centers – the county has already indicated that it will not permit any new data center development.

Wednesday’s vote will come after a public hearing addressing concerns surrounding data centers during the board’s evening session. If approved, the ordinance would kick in Jan. 1, 2027 and would apply to all cars, trucks and motorcycles, regardless of value.

Currently, Chesterfield’s tax rate on data centers is 24 cents per $100 of assessed value. For comparison, Henrico’s was raised from 24 cents to $2.60 per $100 in an effort to slow down the facilities’ development. Henrico has since shuffled this money into a fund buoying affordable housing.

Richmond doesn’t have data centers inside city limits.

Chesterfield’s attractive-to-business rate has been guaranteed for the three Google campuses. These facilities, known as hyperscale data centers, are enormous warehouses filled with thousands of computer servers that store data and power cloud computing and AI services.

The associated environmental costs have been a lightning rod though, as public opinion has shifted against data center development.