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 investment of $500 million and the requirement for certain infrastructure and safety systems. The bill outlines that qualified businesses operating within these data centers can receive tax refunds on purchases of enterprise information technology equipment and computer software, as well as for substantial refurbishments made within a twenty-year period following 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 bill mandates that 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 must be submitted with applications for sales tax refunds on relevant purchases.

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