Council Letter
                                  City of Danville, Virginia




CL - 2700                                                                       OLD BUSINESS        C.
City Council REGULAR MEETING
Meeting Date: May 19, 2026
Subject:       Consideration of a Data Center Tax Rate Increase.
From:          Henrietta Weaver, Budget Director

COUNCIL ACTION
An Ordinance of the Council of the City of Danville, Virginia Amending and Reordaining Section 37-37
of the Danville City Code to Increase the Data Center Tax Rate from $0.25 (Twenty-Five Cents) on
Every $100 (One Hundred Dollars) of Assessed Value to $1.20 (One Dollar and Twenty Cents) on
Every $100 (One Hundred Dollars) of Assessed Value Effective July 1, 2026.
Final Adoption

SUMMARY
The Fiscal Year 2027 budget includes a $0.95 increase in the Data Center Tax rate from $0.25 per
$100 of assessed value to $1.20 per $100 of assessed value, effective July 1, 2026.

BACKGROUND
The Code of the City of Danville, Virginia, 1986, as amended, was revised on October 4, 2018, to
establish Section 37-37, entitled “Data Centers and Data Center Tax Rate.” This section created a
separate tax classification for computer equipment and peripherals used in qualifying data center
facilities. Since adoption, the Data Center Tax rate has remained at $0.25 per $100 of assessed value.
The attached ordinance amends Section 37-37 to update the rate to $1.20 per $100 of assessed value,
as incorporated into the Fiscal Year 2027 Adopted Budget. The proposed amendment does not alter
eligibility criteria or valuation methodology and is limited solely to the tax rate adjustment.

RECOMMENDATION
It is recommended that City Council approve the attached ordinance amending the City Code for the
Data Center Tax rate.

                                            Attachments
1.    Ordinance
                                                                                                                   PRESENTED: May 5, 2026

                                                                                                                    ADOPTED: May 19, 2026

                                                              ORDINANCE NO. 2026— 05 . 06


                                           AN ORDINANCE OF THE COUNCIL OF THE CITY OF DANVILLE, VIRGINIA
                       AMENDING          AND    REORDAINING                  SECTION         37- 37 OF THE     DANVILLE        CITY CODE        TO
                       INCREASE         THE     DATA    CENTER               TAX      RATE    FROM $    0. 25 ( TWENTY- FIVE CENTS)             ON
                       EVERY $ 100 ( ONE HUNDRED DOLLARS) OF ASSESSED                                      VALUE    TO $ 1. 20 ( ONE DOLLAR
                       AND     TWENTY         CENTS)        ON EVERY $ 100 ( ONE HUNDRED                        DOLLARS)       OF ASSESSED
                       VALUE        EFFECTIVE        JULY     1,    2026.


                                           NOW THEREFORE BE IT ORDAINED, by the Council of the City of Danville,

                       Virginia, that Section 37- 37, entitled " Data Centers and Data Center tax rate", of the Article II,


                       entitled "   Levy and    Rate of Tax          on     Real   Estate,   Tangible   Personal   Property, Etc.",   of Chapter


                       37, entitled"    Taxation",    of the Code of the City of Danville, Virginia, 1986, as amended, be, and

                       the same is hereby, amended and reordained to read as follows:

                                           Sec. 37- 37. — Data Centers and Data Center tax rate.


                                            b) A separate tax rate is levied on the computer equipment and peripherals

                       used in a Data Center. A Data Center is a facility whose primary services are the storage,

                       management, and processing of digital data as defined in subsection ( a) above. The facility

                       must     also    house    equipment            used      for   the    transformation,   transmission,    distribution,    or



                       management of at least twenty ( 20) megawatts of electrical power capacity. The Data Center

                       tax   rate   is twenty- five   cents    ($
                                                                     0. 25` one dollar and          twenty cents ($ 1. 20) per one hundred

                       dollars ($    100. 00) of assessed value ( which is determined by applying a depreciation schedule

                       to arrive at the fair market         value);       and


                                           BE IT FURTHER ORDAINED that all other provisions and Sections of said

                       Article, Chapter and Code be, and the same are hereby, continued in full force and effect

                       unless and until the same are hereafter amended or repealed; and

                                           BE IT FINALLY ORDAINED that this Ordinance                          shall be and become effective


                       on and as of July 1, 2026.



  OFFICE    OF THE
  CITY   ATTORNEY


     CITY OF
DANVILLE,   VIRGINIA
                                                           Approved:




                                                                  Mayor


                       Attest:



                           5AANL- rfrt -
                                      Clerk




                       Approved         t
                       F   rm   and         al   uffi ie




                                      City Attorne




  OFFICE    OF THE
  CITY   ATTORNEY


     CITY   OF
DANVILLE,   VIRGINIA