Two debates in two very different communities were united by a common concern. One took place in the state’s largest city, the other in a small, rural town.
The topic intertwining them: data centers.
This comes at a time when lawmakers are about to decide on state tax incentives to draw the tech companies to South Dakota.
At a town hall in Deuel County Tuesday night, over 100 people showed up to find out answers and express their concerns with a proposed data center in Toronto, South Dakota. About an hour
south, people spilled out of the Sioux Falls City Council Chambers as councilors looked at rezoning land for another potential data center.
Although the two are in completely different settings, one thing is clear: the data center boom is here. And South Dakotans are taking note.
Liz Tiger is a community organizer with Dakota Rural Action. DRA teamed up with Residents for Rural and Agricultural Land to hold the town hall. Tiger said in Deuel County many of the concerns are the same as in Sioux Falls.
“You know, water is always going to be a concern, traffic in and out,” Tiger said.
Tiger also mentioned energy and infrastructure. The proposed data center in Deuel County is expected to bring around 200 new jobs, and she said the area is worried about its lack of infrastructure to absorb that.
“There are concerns about overwhelming emergency services as well as towns not being prepared for this influx of people. You know, and even if this influx ends up being far less than that, there’s still a concern," Tiger said. "Before the permanent jobs come in there was some wild numbers thrown out for the amount of construction workers that would need to be on-site. And EMS and the volunteer services in the area are very concerned about that.”
Tiger said the ambulance and fire department in Deuel County are volunteer farmers and ranchers in the area. Some are concerned that an increase in workers will put strain on those already-depleted services.
Tiger said the town hall was created to hear from both those for and against the issue. That includes proponents like Rep. Kent Roe in the area, who’s behind House Bill 1005 in the state Legislature. The bill would provide a sales and use tax exemption on some data center goods and services. It specifically outlines computer hardware, cooling systems, surveillance systems,
fiber optic cabling and more. Those exemptions are valid for 50 years under the bill.
Rep. Roe serves Deuel County. Applied Digital, the company proposing a data center in the county, said it wouldn’t come to the area without the incentives. The Gemini Data Center proposed in Sioux Falls also said it would need a state sales tax incentive to build.
Tiger said the bill was discussed at the town hall.
"There was a speaker who made mention of this tax exemption bill and made mention that their representative was the one putting it through. So, people are just starting to learn about this, I think,” Tiger said. “It’s definitely a concern. And I think there is a disconnect between at least this section of folks, at least southern Deuel County and their elected officials.”
Meantime, the city council meeting in Sioux Falls ran six hours long, mostly from residents voicing concerns over data centers. Many pleaded for the council to postpone a vote until HB 1005 could be decided. That included Penny Baybridge, a resident who identified herself as such during public testimony.
“There’s no citizens that are exempted for 50 years. Even our veterans who are 100% disabled get a small tax break, but they don’t get the whole thing. And businesses are a for-profit business. They should be paying taxes. They shouldn’t be treated better than the people. We should be treated equally," Baybridge said. "They should be paying taxes. And I would ask you to consider not passing this or at least setting it aside until after the Legislature convenes because if this passes, what is happening you're putting into place a business that will be exempted from the taxes. And I think that would be unfair to the people.”
Others expressed similar feelings. A person in public testimony who identified herself as Linda Montgomery from Fairview told the council she thinks they should have postponed until they learned about potential tax incentives that would be given.
“This is big business, big money. We are citizens. And they’re expecting to do 10 data centers in South Dakota. So that’s why I came here tonight is to say stop," Montgomery said. "If these big companies, these millionaire companies, won’t come because we won’t give them tax breaks, they need to go someplace else. We don’t need us taxpayers to be paying their way for their multimillion-dollar company.”
However, some have looked at the property tax incentives to local communities as a potential positive to address growing property tax issues. Some, like Rep. Kent Roe, believe the economic impact to both South Dakota and its communities could yield a huge benefit.
Liz Tiger with Dakota Rural Action said her group isn’t necessarily opposed to data centers. She said DRA wants to ensure they’re finding communities with the right fit.
“We want to ensure that the community’s voices are heard when these data centers come in. And I think that there will be locations across the state that will welcome something like this into their community,” Tiger said. “And I think there are areas where maybe it’s not appropriate. I think that there’s appropriate places, and the people that live there deserve to have a say in it and deserve to be a part of the conversation.”
Tiger said nobody wants to have contention when starting a new business, and Dakota Rural Action hopes to encourage those meaningful conversations across the state. Dakota Rural Action is a group who had a large impact on conversations surrounding the Summit Carbon Solutions Pipeline in South Dakota. According to their website, DRA believes "decisions must be locally driven, local governments need tools and support to evaluate proposals, public dollars must serve the public good and transparency is non-negotiable" in regard to data centers in the state.
The 2026 Legislative Session begins Jan. 13, 2026, where data centers are expected to be a major discussion point.
