Data Centers Provide Communities With Increased Tax Revenue

When you think of a thriving community, what comes to mind? Well-maintained roads, top schools, accessible public services, and a healthy economy likely top the list. For many communities, these benefits are increasingly being powered by an unlikely ally: data centers.

These massive hubs of digital infrastructure are meeting the rising global demand for data storage and processing. They are also becoming pivotal drivers of local economic growth. Among the most compelling benefits of data centers is their ability to generate significant tax revenue

The Loudoun County Success Story

Loudoun County, Virginia, often dubbed the "Data Center Capital of the World," provides a compelling example of how data centers can reshape a community's fiscal landscape. In 2018, the county hosted about 13 million square feet of permitted data centers. By 2024, that figure skyrocketed to 43 million square feet—a 231% increase in just six years.

This remarkable growth has substantially boosted Loudoun's tax base. The county's data center industry now contributes an estimated $890 million annually in tax revenue, nearly matching its entire operating budget of $940 million.

What makes data centers particularly advantageous is their cost-to-revenue ratio. For every dollar of tax revenue received from data centers, the county spends just $0.04 to support them, compared to $0.25 for traditional businesses. This financial efficiency has allowed Loudoun County to maintain the lowest real property tax rate in Northern Virginia—approximately 25% lower than neighboring counties.

County residents witness the benefits of this surplus revenue every day. Over the past 15 years, Loudoun County has invested $1 billion in road improvements and built 36 new schools, elevating the county's quality of life.

Community Benefits of Increased Tax Revenue

The influx of tax revenue from data centers extends far beyond property tax relief. It empowers municipalities to invest in critical public services and infrastructure projects. In Loudoun County, for instance, the financial surplus from data centers has helped to support public education, expand healthcare initiatives, fund capital improvement programs, and even improve recreational amenities.

Moreover, data centers have substantial economic ripple effects. According to a CBRE report, each direct job in the data center industry creates an average of 7.4 ancillary jobs across the broader economy. These include roles in construction, maintenance, and local service industries, further amplifying the positive impact.

A National Trend with Local Impacts

The success stories of Loudoun County reflect a broader national trend. States like Nebraska and Ohio also leverage data center development to fortify their tax bases and stimulate economic growth. Property and sales tax revenues from data centers have funded community development projects in Nebraska. Ohio has also seen similar benefits from investments in digital infrastructure.

Data centers are more than facilities for storing and processing data; they are economic growth catalysts that benefit the entire community. By generating substantial tax revenue, these facilities enable communities to fund essential services, build critical infrastructure, and create jobs, all while keeping tax rates manageable for residents.

The potential of data center development and success stories across the country offer a compelling roadmap. The increased tax revenue from these data centers has become a lifeline for communities seeking sustainable growth and improved quality of life. With careful planning and strategic investment, Wyandotte County can harness data centers' power to build a brighter future for its residents.

Wyandotte Economic Development Council

Let Wyandotte Economic Development Council (WYEDC) help you and your business harness "The Power of the Dotte." Our mission is to promote and strengthen Wyandotte County's economy through innovative approaches to programs, partnerships, incentives, and leadership in industrial, residential, office, and retail markets. Contact us today and follow us on LinkedIn and Facebook!