West Virginia looks to AI data center boom to help eliminate state income tax

West Virginia leaders are escalating the debate over data centers, with Gov.

Patrick Morrisey unveiling a seven-point plan developed with lawmakers to reduce and eventually eliminate the state income tax while addressing concerns about natural resources and infrastructure.

The plan comes as data centers are becoming a political flashpoint nationwide, with states looking to cash in on billions of dollars in investment and new jobs while communities raise concerns about utility costs, water use and local control.

The massive facilities needed to power the artificial intelligence boom are also driving electricity demand higher, putting new pressure on power grids across the country.

Under the plan, West Virginia would dedicate 50% of revenue generated by approved hyperscale data center projects to reducing and eventually eliminating the state personal income tax , while directing some remaining revenue to counties and infrastructure projects.

"Today, as the world stands on the cusp of a new digital and economic frontier, West Virginia is stepping forward once again to lead, not by repeating the mistakes of other states, but by implementing a proactive, 20-year development strategy on our terms," Morrisey said in a statement obtained by Fox News Digital. ‘BACKYARD BRAWL’ IGNITES AS WEST VIRGINIA'S MORRISEY MOVES TO POACH BLUE STATE RIVAL SPANBERGER'S JOBS The second listed "principle" in Morrisey’s plan says all West Virginians should benefit from data center projects approved through Charleston’s "High Impact Data Center Designation (HIDC)" process and the revenue they generate.

The process was established under a separate 2025 state law.

Morrisey’s plan includes "direct tax relief for citizens," with none of the HIDC revenue entering the state general fund.

AN OVERLOOKED RED STATE QUIETLY BUILT ONE OF AMERICA’S MOST COMPETITIVE TAX SYSTEMS "By law, 50 percent of project revenue is dedicated directly to reducing and ultimately eliminating the State Personal Income Tax," the plan reads.

Counties hosting data centers would receive 30% of the revenue for schools and local government, while 10% would be distributed to all 55 counties and another 10% would fund infrastructure upgrades, including public water systems.

Water infrastructure has become a flashpoint across parts of southern West Virginia that have struggled since the coal industry’s decline.