The proposed bill establishes a sales and use tax refund for goods and services related to data center operations in South Dakota. It introduces definitions for key terms such as "computer software," "data center," "enterprise information technology equipment," and "qualified business," among others. A "qualified data center" is defined as a facility that meets specific criteria, including a maximum initial furnishment cost of $500 million and certain operational requirements. The bill outlines that qualified businesses operating within these data centers are entitled to refunds on taxes imposed under chapters 10-45 and 10-46 for purchases related to the initial setup and substantial refurbishments of the data center over a twenty-year period.

To qualify for the tax refund, businesses must provide documentation to the Governor's Office of Economic Development to verify their plans for the proposed data center. The bill mandates that qualified data center owners must supply operators or tenants with documentation confirming that the center meets the established criteria. This documentation is necessary for operators or tenants to apply for sales tax refunds on their purchases of information technology equipment and software used in the qualified data center.

Statutes affected:
Introduced, 01/30/2025: 10-45-47.1