After House bill dies, governor says data-center tax incentives will be reviewed on their merits
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Summary
Reporters pressed the governor about a bill that would have exempted data-center equipment from sales tax; the governor said he will "consider everything" that reaches his desk and noted data centers can still pay significant local and state taxes even with equipment exemptions.
Reporters asked whether the governor would support sales-tax exemptions for data-center equipment after House Bill 105 failed in committee. An attendee noted that many other states exempt such equipment and that without an exemption South Dakota may be at a competitive disadvantage.
The governor declined to make a firm pledge, saying the administration will review proposals as they reach his desk. "We've got a whole spectrum of bills dealing with... the data centers and other things... and, so when the dust settles, we'll review it when it gets to my desk," he said. The governor added that incentives are commonly used by other states and that data centers could represent a "big opportunity for South Dakota."
A commentator at the session observed that 40 or more states do not tax certain equipment and that South Dakota’s broad sales-tax base means any rebate would be a carve-out from long-standing policy.
The governor also said that even with equipment exemptions, data centers typically pay "millions of dollars in local taxes and state taxes, property taxes," and bring employment-related revenue, factors he said the state will weigh as lawmakers debate proposals.
Next steps: any new bills or amendments that reach the governor’s desk will be considered during the regular legislative process; reporters were referred to legislative hearings for bill-by-bill detail.
