Abstract: In the context of the digital economy, the problem of tax source deviation, especially under the principle of value-added tax production location, is further amplified. This article incorporates digital infrastructure construction into the analysis framework of tax distribution, and uses panel data from prefecture level cities to examine the internal mechanism and effect of digital infrastructure construction on the horizontal distribution of regional value-added tax revenue. Firstly, empirical research has found that digital infrastructure has a negative impact on the horizontal distribution of value-added tax, mainly affecting the relative tax revenue of regional value-added tax through two channels: digital innovation and digital consumption. Secondly, the calculation results of the total effect show that the construction of digital infrastructure has a negative impact on the relative income of value-added tax, that is, the increase in per capita value-added tax income brought about by increasing digital innovation is less than the tax loss brought about by increasing digital consumption. This makes it difficult for local governments to rely on traditional investment in infrastructure to achieve tax growth in the digital economy. Thirdly, heterogeneity testing indicates that the impact of digital infrastructure on the horizontal distribution of value-added tax varies between the eastern and central western regions, with a greater negative impact in areas with lower levels of marketization and population outflow. Fourthly, the analysis of regulatory effects shows that the construction of digital infrastructure in areas with lower urbanization rates can significantly promote digital innovation while slightly increasing digital consumption, resulting in an increase in the relative income of value-added tax in the region and alleviating the imbalance in horizontal tax distribution. However, considering that the overall level of urbanization in China has exceeded 60% and is still continuously improving, the construction of digital infrastructure is no longer able to alleviate the tax imbalance in developed and relatively underdeveloped areas of the digital economy. Therefore, the existing value-added tax system is not conducive to expanding digital infrastructure in some places. It is necessary to slow down the tax distribution imbalance caused by the digital economy through tax system reform and fiscal system reform, and take corresponding incentive measures to support local governments in developing digital infrastructure and digital economy.