Berkeley County Commissioner John Hardy, a former state delegate, says more clarification is necessary for a formula the state has established to split the tax base generated by data centers.
Berkeley County officials, in a 10-page letter to their state tax department counterparts, have questioned how a new data center tax formula will allocate revenue.
“We just simply have questions of how this is going to work, how we implement it, and where those tax dollars are going to go,” Hardy said on MetroNews Talkline.
Berkeley County is one of several locations in West Virginia where developers could be building data centers, the big warehouses for computer servers. So officials in other communities will likely have similar questions.
Earlier this year, the governor announced plans for a big data center development on 548 acres in Falling Waters, Berkeley County.
“We’re just concerned about this new massive influx of growth into the county,” Hardy said. “If this is going to be a responsibility that’s put on our county to take in these dollars and then send them to the state, or however that works, we just need clarification.”
The “Power Generation and Consumption Act,” supported by Gov. Patrick Morrisey’s administration and signed into law last year, included a formula for how to divvy up the property tax base generated by data center development.
50% for a personal income tax reduction fund;
30% to the county or counties where the data center is located;
10% to go to all counties on a per capita basis;
5% to be used for an economic enhancement grant fund; and
5% for an electric credit stabilization and security fund.
Berkeley County officials seek clarification on fourteen specific legal and fiscal questions. The letter expresses deep concerns that the law may unconstitutionally seize local funds, threaten school bonding capacity and trigger mandatory tax rollbacks for residents.
“Obviously, whenever there’s a new process, a new piece of legislation — these data centers are very new to West Virginia — there’s going to take some time to work this out,” Hardy said.
“But I think if we could just give some information to our local citizens about — you know, how this is going to work, it would go a long way.”
Hardy questioned whether using local ad valorem tax revenue in the state’s personal income tax reduction framework is even constitutional, saying that ultimately it will likely take a court — not lawmakers or the governor — to decide.
“One of the questions that I really ask is, is it constitutional for this ad valorem tax to be used in that way?” Hardy said.
“And I think that’s a question that I can’t answer. I don’t think that’s a question that the legislature or the governor can answer. I think at some point in time, the judicial branch is going to have to weigh in on this.”
The Berkeley County Commission, through legal director Anthony Delligatti, sent a 10-page letter to the state tax commissioner to ask questions about the financial split. MetroNews obtained the letter through a Freedom of Information Act request to the state.
In the state’s reply to the information request, the tax department defended the legislation as a bipartisan effort to benefit all citizens by funding water infrastructure and reducing state income taxes.
“That distribution was purposefully designed, through a bi-partisan effort in the 2025 Regular Session, to ensure that this type of economic development would benefit not only the counties where these projects were located but all West Virginians,” wrote Mark Morton, general counsel for the state tax department.
The state’s response continued, “That’s why House Bill 2014 dedicates half of the growth of general property tax revenue from these projects (potentially hundreds of mi lions of dollars each year) to reducing the state’s income tax.”
And, “It’s also why another ten percent of that revenue is allocated to water infrastructure and grid stabilization projects that can help all West Virginians, especially those who struggle daily with access to clean water and affordable electricity.”
“Under House Bill 2014, the county where microgrids and data centers are located keeps thirty percent of the in growth in general property tax revenue as well as one hundred percent of the base value, bond debt and excess levy revenue while the rest of the counties share in another ten percent of the new general revenue — meaning each of these projects, through the allocation formula House Bill 2014 enacts, will provide an additional, and much needed, source of funding for county services and schools throughout the state.”