Manassas staff: bank tenant at Brickyard facility claims franchise tax exemption for computers; council seeks legal and legislative clarity

Manassas — City staff told the Manassas City Council that a recent filing by a bank operating at the Brickyard data-center facility claims an exemption from local business personal-property tax, raising questions about whether the city can rely on data-center personal-property revenue for next year's budget.

Staff said the tenant filed by the April 15 deadline and reported that the equipment in the building is bank-owned and used internally; under existing state law staff cited in the meeting, banks that meet the statutory standard pay a bank-franchise tax in lieu of most other tangible personal-property taxes. "They are exempt from those taxes," a staff member who reviewed filings said during the meeting. Staff added they are performing due diligence to confirm the self-reported filing.

Why it matters: The city's manager and staff had discussed potential personal-property receipts from data centers in previous budget work, and an unexpected exemption could reduce forecasted revenues. Council members said the discovery underscores the risk of relying on data-center filings for near-term budgeting.

Councilors asked staff several follow-ups: who marketed or arranged the Brickyard development, whether similar filings could appear at other data centers planned in the city, and what changes — zoning, contract language or state law — could reduce the city's exposure. Several council members asked staff to research options and bring back a recommended approach to clarify revenue expectations and to consider whether to pursue state-level changes to exclude data-center equipment from the bank-franchise exemption.

Staff repeatedly told the council that no money from that filing has been budgeted and that the city's financial documents did not assume receipt of the disputed personal-property revenue. Officials also noted the building owner remains taxable for real-estate assessment; the exemption discussed in the meeting applied to business personal property reported by the tenant on the April filing.

Council members suggested pursuing multiple avenues: enhanced vetting of future major projects, zoning or contract terms to limit the city's revenue risk, and a legislative request to the General Assembly that would clarify or modify the franchise-tax exemption as applied to data centers. Staff noted the city has an upcoming legislative forum and said they would include the issue in future discussions with regional legislative partners.

Next steps: Staff will continue verification of the Brickyard filing, report back on other data-center filings in nearby jurisdictions, and prepare options for council consideration — including potential legislative remedies and zoning or contract approaches — for discussion at a future meeting.