Taxation – County may require data center company to provide customers’ names

Where a data center company argued that Fairfax County was not entitled to information about its customers, so that it could verify that those customers are paying taxes on customer-owned equipment stored in the data centers, this argument was rejected.

Background

Fairfax County demanded that CoreSite LLC, a data center company, provide customer names, to verify that those customers are paying taxes on customer-owned equipment stored in CoreSite’s data centers. The circuit court ruled in favor of the County.

Taxpayers

CoreSite argues that the County is barred from ascertaining information of its customers whose taxpayer status is unknown. This court disagrees. Code § 58.1-3109(6)’s mandates that commissioners “make a complete assessment of any taxpayer’s” personal property. To make a “complete assessment” Code § 58.1-3109(6) provides that the County may “[r]equire” anyone “to furnish information relating to tangible or intangible personal property . . . of any and all taxpayers.” This necessarily includes information that assists in determining ownership and whether an entity is subject to taxation.

CoreSite reads “any and all taxpayers” to limit the commissioner’s authority to entities already known to be subject to Fairfax County taxes and thus to exclude customers whose status is uncertain. That reading cannot be squared with the surrounding text.

It is true that an entity’s tax status is binary, it is either “subject to taxation under the laws of this Commonwealth” or it is not, but the County must determine the status. In other words, personal property exists throughout Fairfax County, and the County must determine whether the property is taxable using the tools the General Assembly provides. In this instance, the General Assembly provided a powerful tool: the power to compel an entity to “furnish information relating to tangible or intangible personal property . . . of any and all taxpayers.”

Two Attorney General opinions support this interpretation. The advisory opinions’ persuasiveness is bolstered by the General Assembly’s apparent acquiescence to the Attorney General’s interpretation of the scope of a commissioner’s power to investigate entities with an unknown tax status. Accordingly, the use of “taxpayers” in Code §§ 58.1-1, -3109(6), and -3110 does not bar the County from investigating entities with an unknown tax status when it is determining ownership of taxable personal property.

Identification

CoreSite nevertheless asserts that the County failed to “specifically identif[y] taxpayers” in the summons as required by Code § 58.1-3110. This court agrees.

Code § 58.1-3110 allows a commissioner to “summon the taxpayer or any other person to appear before him at his office, to answer, under oath, questions touching the tax liability of any and all specifically identified taxpayers and to produce documents relating to such tax liability, either or both.” This court does not decide whether Code § 58.1-3110 always requires a summons to name taxpayers or whether a sufficiently precise description that uniquely identifies the taxpayers would satisfy the statute in a different case.

Here, the County requested lists of “all current tenants,” “entities otherwise leasing, contracting, or using space or receiving services anywhere inside the buildings or other improvements,” and “copies of all related leases or service contracts for all Core[S]ite [c]ustomers [at the data centers].” While these groups certainly may contain taxpayers, the County did not specifically identify any of them.

First, the County did not name any taxpayers—a defect the County itself recognizes when it argues that the statute does not require naming an entity. Second, even under the less strict definition requiring precision and exactness, the County still falls short because—at most—it identified groups that may include taxpayers but not any of the taxpayers themselves. The statute requires more.

Customer agreements

In its customer agreements, CoreSite agrees to keep the terms of the contract confidential—including customer names. CoreSite thus argues that the confidentiality provision bars it from releasing customer information without a court order.

The confidentiality provision, however, contains a carveout: CoreSite may provide “any information as required to any receiver or governmental or quasi-governmental entity, or to any person or entity with a valid court order.” Therefore, under the plain language of the carveout in the parties’ contract, CoreSite is not barred from providing information.

Affirmed in part, reversed in part and remanded.

CoreSite, LLC v. County of Fairfax, Virginia, Record No. 0510-25-4, June 16, 2026. CAV (Duffan). From the Circuit Court of Fairfax County (Stoney). Matthew N. Leerberg (Doug P. Hibshman; Dana Molinari; Fox Rothschild LLP, on briefs), for appellants. Martin R. Desjardins, Assistant County Attorney (Elizabeth D. Teare, County Attorney; Corinne N. Lockett, Deputy County Attorney; Daniel Robinson, Senior Assistant County Attorney; Office of the Fairfax County Attorney, on brief), for appellee. VLW 026-7-245. 20 pp.

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VLW 026-7-245