South Dakota Senate Bill 157 proposes an exemption from gross receipts tax for sales of “enterprise information technology equipment” and software in excess of $2 million used in South Dakota data centers. Enterprise information technology equipment eligible for the exemption includes: (i) computer hardware, servers, routers, cooling systems and towers; (ii) temperature control and power infrastructure; (iii) exterior dedicated business-owned substations, and (iv) racking systems and other equipment necessary to maintain and operate a qualified data center. A qualifying data center is a South Dakota facility with a primary purpose to serve as a centralized repository for the storage, management, and dissemination of electronic information and data. This proposal would be restricted to data centers completed or “substantially refurbished” after December 31, 2021. Currently, the bill is set for a hearing before the South Dakota house commerce and energy committee on February 23, 2022.