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Exempt from the state sales and use tax gross receipts for certain services to a partnership.

South Dakota will no longer count guaranteed payments to certain partners as taxable income for state sales and use tax purposes. This exemption applies to payments made to individual partners, small corporations where only the owners work, and single-owner LLCs with no employees. The change reduces the tax base for businesses structured as partnerships by excluding these partner compensation payments.

Provide a sales and use tax refund for goods and services related to data center operations.

South Dakota is creating a new sales tax refund program for data center companies that purchase equipment and software for their operations. Companies operating qualified data centers can now apply for refunds on sales taxes paid for items like computer servers, cooling systems, power infrastructure, and specialized software. This change amends the state's tax refund procedures to include these new eligibility categories for data center-related purchases.

Exempt any food grown, raised, or otherwise produced in this state from state sales tax.

This bill removes state sales tax from food products that are grown, raised, or produced in South Dakota, as long as they're clearly labeled as such. The exemption applies to all in-state food production, meaning South Dakota farmers and food producers could sell their products tax-free compared to out-of-state competitors. This creates a tax advantage for locally-produced food sold within the state.

Provide a means by which an agricultural producer may request an automatic refund of an assessment on crops.

Farmers in South Dakota can now opt out of paying promotional assessments (fees) on crops like wheat by submitting a refusal form to the state commissions. The bill creates a new process across multiple agricultural commodity programs that allows producers to reject these automatic fees at the time of sale, rather than having to request a refund after paying. This applies to wheat, corn, soybeans, and other commodity assessments currently collected by state agricultural commissions.

Reduce a maximum property tax mill levy on owner-occupied single-family dwellings for school district general funds, and to repeal certain sales tax exemptions.

This bill reduces the school property tax on owner-occupied single-family homes from $2.68 per $1,000 of value to $1.99 per $1,000 of value, starting with taxes payable in 2026. The bill also repeals certain sales tax exemptions to help offset the lost school funding from the property tax reduction.

Subject advertising services to a gross receipts tax, and to allocate proceeds to property tax relief.

This bill adds a gross receipts tax on advertising services, which are currently exempt from South Dakota's tax. Revenue from this new tax will be allocated to property tax relief for South Dakota residents.

Authorize municipalities to impose a new tax to fund capital improvement projects.

Municipalities can now impose a new local gross receipts tax of up to 1 percent on sales of goods and services to fund capital improvement projects, but only if a capital improvement board approves the plan and at least 60 percent of local voters support it in an election. This tax works the same way as the state sales tax but applies only within the municipality that creates it and has a lower rate cap than the state tax.

Revise the distribution of revenue from the cigarette tax.

This bill reduces the amount of cigarette tax revenue directed to tobacco prevention programs, lowering it from $5 million annually to $2 million. The change means that instead of $35 million going to the general fund, now $32 million will go there, with the extra $3 million in tobacco tax revenue redirected away from prevention efforts.