The proposed bill establishes a sales and use tax refund for goods and services related to data center operations in South Dakota. It introduces new definitions for 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 can receive tax refunds for enterprise information technology equipment and computer software purchased for initial setup and substantial refurbishments within a twenty-year period from the qualifying date.

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 commissioner of the office will determine eligibility and notify the Department of Revenue regarding the entitlement to the tax refund. Additionally, data center owners intending to co-locate operators or tenants must provide documentation confirming that the center qualifies under the new definitions, which operators or tenants must include in their applications for sales tax refunds on relevant purchases.

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