House Bill Would Put Federal Electricity Tax On Data Centers

A House bill proposes a federal tax on electricity used by data centers, set at 1 cent per kilowatt-hour for facilities with more than 1 megawatt of power capacity. The tax would generate an estimated 1.76 billion dollars annually, with revenue directed toward housing, conservation, infrastructure, and energy technology. The proposal responds to concerns that communities bear the costs of data center growth and expanding AI workloads while not sharing in the benefits, and it follows Virginia's adoption of a similar state-level tax earlier in the year. For large operators, the tax could represent significant annual costs, though its impact on facility siting and power procurement decisions may depend on how competitive other factors like grid access and electricity costs are across different locations.