Budget & Taxes (Tax Incentives)

passed · South Dakota · Senate Feb 18, 2026

SB 234: modify provisions pertaining to the purchasing of goods and services related to data center operations.

This bill exempts sales tax on enterprise information technology equipment and computer software purchased for use in South Dakota's qualified data centers. It directly affects data center owners, operators, or tenants (referred to as "qualified businesses") who meet specific criteria, such as having facilities classified as real property subject to taxation and equipped with fire suppression systems. The key mechanism requires businesses to submit documentation to the Department of Revenue to verify eligibility and maintain annual certification. To retain the exemption, businesses must also ensure electric service agreements avoid shifting costs to other customers and confirm water usage compatibility with local providers. The tax exemption applies to equipment like servers, cooling systems, power infrastructure, and security systems used exclusively in these facilities.

Topics ✗ Budget & TaxesOpposes Budget & TaxesExempts sales tax on data center IT equipment, reducing state tax revenue for qualified businesses.90% confidence ✓ TechnologySupports TechnologyTax exemption for data center IT equipment lowers operational costs, incentivizing investment in technology infrastructure and supporting data center growth.90% confidence

Sub-Topics Procurement Sales Tax Tax Incentives

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signed · South Dakota · House Mar 30, 2026

HB 1254: exempt any soil amendment used exclusively for agricultural purposes from sales tax.

HB 1254 exempts soil amendments sold in single purchases of 500 pounds or more from South Dakota's sales tax, but only when used exclusively for farming. This directly affects farmers or agricultural businesses buying these products in qualifying bulk amounts. The bill adds a specific tax exemption to state law, removing sales tax from qualifying soil amendments defined under existing law. It does not change tax rates for other products or apply to smaller purchases or non-agricultural uses.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill creates tax exemption for agricultural soil amendments, providing direct tax relief to farmers and exempting specific purchases from sales tax.95% confidence

Sub-Topics Sales Tax Tax Incentives

passed · South Dakota · House Feb 17, 2026

HB 1319: update provisions related to tax increment financing districts.

HB 1319 updates tax rules for new or renovated properties in designated areas. It allows county commissioners to use a special formula for up to five years after construction to partially or fully exclude new property value from taxes, but this applies only to specific qualifying properties like new industrial buildings ($30k+ value), affordable housing (meeting income rent limits), or commercial renovations ($30k+ value). The law explicitly excludes properties within tax increment financing districts from this tax relief. After five years, these properties must be taxed at standard rates like other properties. This directly affects developers and property owners building qualifying structures in eligible zones.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax exclusions for affordable housing and qualifying commercial/industrial properties, reducing tax burden for development while promoting housing affordability.95% confidence ✓ HousingSupports HousingBill explicitly includes affordable housing as qualifying for tax exclusions, incentivizing development through tax benefits.95% confidence

Sub-Topics Business Taxes Property Tax Tax Incentives Affordable Housing Property Taxes Renters

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passed · South Dakota · Senate Feb 11, 2026

SB 161: repeal an exemption for certain health care facilities.

SB 161 repeals a tax exemption for certain nonprofit health care facilities in South Dakota, ending their current property tax exemption. This affects facilities previously qualifying under repealed sections 10-4-9.3 and 10-4-35, including licensed hospitals, clinics, mental health centers, and wellness centers meeting specific criteria (like 501(c)(3) status and non-profit operation). The bill removes the exemption, requiring these facilities to pay property taxes on their entire property - previously only the portion not used for health care services was taxable. The change directly impacts nonprofit health care organizations that relied on this exemption for tax purposes.

Topics ✓ Budget & TaxesSupports Budget & TaxesRepeals tax exemption for health care facilities, increasing state property tax revenue. Closes a tax loophole, aligning with fiscal responsibility indicators.95% confidence

Sub-Topics Property Tax Tax Incentives

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signed · South Dakota · Senate Feb 11, 2026

SB 12: provide for a refund of property taxes in previous years for qualifying veterans and surviving spouses.

South Dakota's SB 12 allows qualifying veterans with certain disabilities (like loss of use of both lower extremities) or their unremarried surviving spouses to request refunds for property taxes paid in the previous four years if they missed the application deadline for an existing property tax exemption. The bill amends tax exemption rules to permit petitions to county commissioners for these refunds, which the commissioners may approve or deny at their discretion. It directly affects veterans and surviving spouses who previously paid taxes they might have qualified to avoid. The refund mechanism applies only to taxes paid in the four years prior to the petition, not future exemptions.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax refunds for veterans, reducing their tax burden - direct tax relief aligning with support indicators.95% confidence ✓ VeteransSupports VeteransEnables property tax refunds for qualifying veterans and surviving spouses who missed exemption deadlines, expanding financial benefits through retroactive relief.95% confidence

Sub-Topics Property Tax Tax Incentives Veteran Benefits Veteran Education Veteran Housing

passed both · South Dakota · House Mar 9, 2026

HB 1241: modify the requirements for public notice of a hearing prior to a vote to impose an excess tax levy, and to modify requirements to refer an excess tax levy of a school district to a vote.

HB 1241 increases the property tax exemption amount for disabled veterans and surviving spouses in South Dakota. It amends existing law (§ 10-4-40 for veterans and § 10-4-41 for surviving spouses) to raise the value of a primary residence exempt from property taxes. Currently set at $225,000, this exemption applies to owner-occupied homes where the veteran is permanently and totally disabled from service-connected injuries, or to surviving spouses of such veterans. To qualify, applicants must submit a confidential form to the Department of Revenue and maintain occupancy; the exemption ends if they sell the home, stop living there, or remarry (for surviving spouses).

Topics ✓ Budget & TaxesSupports Budget & TaxesIncreases property tax exemption for disabled veterans, providing direct tax relief to qualifying individuals under state tax policy.90% confidence ✓ VeteransSupports VeteransIncreases property tax exemption amount for disabled veterans and surviving spouses, expanding financial relief under veterans' benefits.95% confidence

Sub-Topics Property Tax Tax Incentives

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died · South Dakota · Senate Feb 12, 2026

SB 178: lower a maximum limit on the tax increment base value.

SB 178 would lower the maximum percentage of a political subdivision's total assessed property value that can be allocated to tax increment financing (TIF) districts. Currently, South Dakota law limits this to 12.5%, but the bill would reduce that cap to a lower percentage. This change directly affects cities, towns, and counties that create TIF districts to fund economic development projects. The bill does not specify the new percentage but would restrict how much property value can be used for TIF initiatives within any given area.

Topics ✗ Budget & TaxesOpposes Budget & TaxesBill reduces TIF district tax increment cap from 12.5% to lower percentage, restricting property value allocation for economic development funding.90% confidence ✗ HousingOpposes HousingLowers TIF funding cap, restricting municipal resources for housing development projects and limiting housing investment opportunities.85% confidence

Sub-Topics Tax Incentives Property Development Property Taxes

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died · South Dakota · House Feb 2, 2026

HB 1191: provide a sales tax holiday on firearms.

HB 1191 exempts firearm sales from South Dakota's sales tax on or after December 1st each year. The bill directly affects firearm buyers and sellers within South Dakota, applying to all firearms defined under state law (§ 22-1-2). Key provision: it adds a new tax exemption to Chapter 10-45, removing the sales tax obligation for qualifying firearm transactions during this annual period. This is a straightforward tax policy change with no additional requirements or administrative mechanisms.

Topics ✗ Budget & TaxesOpposes Budget & TaxesCreates tax exemption for firearms, reducing state sales tax revenue and weakening fiscal management by eliminating a revenue stream.95% confidence

Sub-Topics Sales Tax Tax Incentives

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passed · South Dakota · Senate Feb 20, 2026

SB 191: remove the authorization to issue grants as part of a tax increment financing district.

SB 191 removes the ability for local governments (counties or municipalities) to issue grants as part of a tax increment financing district. The bill amends South Dakota law by deleting the provision that allowed "payments and grants" to be included in "project costs" for these districts. This change specifically eliminates the authorization for governing bodies to use district funds for grants, restricting allowable uses to direct project costs like construction, bonds, or professional services. The bill affects how local governments can fund redevelopment projects within designated tax increment districts.

Topics ✗ Budget & TaxesOpposes Budget & TaxesRemoves authorization for local governments to issue grants within tax increment districts, restricting allowable spending uses under fiscal management.85% confidence ✗ HousingOpposes HousingRemoves TIF grant authorization, restricting a funding mechanism for housing projects under South Dakota law.90% confidence

Sub-Topics Tax Incentives Community Development

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died · South Dakota · Senate Feb 12, 2026

SB 203: require the review of a financing plan to establish a tax increment financing district.

SB 203 requires local governments (cities or counties) to obtain an independent third-party review before establishing a tax increment financing district. This review must analyze the project's cost-benefit, projected changes in property tax distribution over time, and expected impacts on jobs, housing, and economic activity. The bill applies to any area where property taxes would be used to fund development projects within a defined district. It adds this review step to existing requirements for creating such districts but does not change who can establish them.

Topics ✓ Budget & TaxesSupports Budget & TaxesRequires third-party review for TIFs to analyze fiscal impacts, promoting responsible budget management within tax increment financing.80% confidence

Sub-Topics Debt & Bonds Property Tax Tax Incentives

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