Bill > HB1005

This bill creates a comprehensive sales and use tax exemption for data center operations in South Dakota, specifically targeting technology infrastructure and equipment. The bill defines several key terms, including "data center" as a centralized repository for electronic data storage and processing (excluding cryptocurrency mining), and "enterprise information technology equipment" which encompasses a wide range of technical infrastructure like servers, networking equipment, power systems, cooling infrastructure, security systems, and specialized telecommunications hardware. To qualify for the tax exemption, a data center must be located in South Dakota, be subject to real property taxation, be established between July 1, 2026, and June 30, 2036, and have fire suppression systems. Qualified businesses can receive a 50-year tax exemption on sales and purchases of equipment and software specifically used in data center operations. To maintain eligibility, businesses must submit documentary evidence to the Department of Revenue, ensure their electric utility agreement does not shift costs to other customers, provide notice to local water providers about water consumption, and file an annual affidavit confirming their qualification. The bill aims to incentivize data center development in the state by providing significant long-term tax benefits for qualifying technology infrastructure investments.

Government Affairs

https://sdlegislature.gov/#/Session/Bill/26317