Last updated: August 26, 2026
Data Center Land in South Dakota (SD)
South Dakota's data center story is still mostly one project — a roughly 500 MW facility a California-backed developer is planning northeast of Sioux Falls — but it's a real, well-documented commitment, and the state's cold climate and lack of a corporate income tax are genuine structural advantages. Lawmakers rejecting a data center sales tax exemption in 2026 is the clearest sign the market is still working out its terms.
⚡ TL;DR — South Dakota Data Center Overview
- • Market stage: newly active, anchored by one major project — Gemini Data Center SD's planned ~500 MW facility northeast of Sioux Falls
- • Timeline: annexation approved October 2025; construction targeted for 2026, operation targeted for 2028, pending final rezoning
- • Site specifics: ~160 acres near I-90 and Rice Street, adjacent to Xcel's Split Rock substation and the Angus Anson power station
- • Climate edge: cold winters support extended free-air cooling, cutting energy and water use relative to warm-climate sites
- • Incentive status: no state corporate income tax, but lawmakers rejected a data center equipment sales tax exemption in the 2026 session
Active South Dakota Activity
- Gemini Data Center SD — Sioux Falls area (primary)
- Xcel Energy Split Rock / Angus Anson corridor
- I-90 industrial corridor generally
Policy & Climate Notes
- No state corporate income tax
- No data center sales tax exemption as of the 2026 session — bill rejected
- Cold-climate free-air cooling advantage for energy and water use
Site Intake
Have land in South Dakota near Xcel or cooperative substation infrastructure?
Submit it for a confidential data center site review. No obligation.
Your information is reviewed privately. We only use submissions to evaluate potential fit and relevant opportunities.
Grid & Utilities in South Dakota
Utility coverage in South Dakota is a mix of investor-owned service, municipal utilities, and rural electric cooperatives, and which one serves a given parcel matters a great deal to how a large-load negotiation actually unfolds. The state's clearest current example is the Sioux Falls-area Gemini project, sited about a mile south of the Veterans Parkway exit off Interstate 90, near the intersection with Rice Street — chosen specifically because it sits just south of Xcel Energy's Split Rock substation and the Angus Anson power station, infrastructure that reportedly supports the project's planned 500 MW draw. That's the pattern to look for on any South Dakota parcel: documented proximity to existing substation or generation infrastructure, not acreage alone. See our interconnection queue guide for how the underlying study process generally works.
Key Development Considerations
- The market is still effectively defined by one large project — comparable-sale and process data outside the Sioux Falls area is thin, so expect more direct negotiation and less standardized process than in an established market
- Lawmakers rejected a 2026 bill that would have exempted data center equipment and software from sales tax, a meaningful gap against the roughly 30 states that already offer some version of that exemption
- Cold-climate free-air cooling is a genuine, verifiable operating-cost advantage, not a marketing claim — it directly reduces both energy and water use relative to warm-climate sites
- As with any early-stage market, final annexation, rezoning, and permitting approvals aren't guaranteed on any single project's timeline — confirm current status before assuming a deal is final
Land Values in South Dakota
With the market effectively anchored by one large, recent project, there isn't yet a meaningful base of comparable data center land sales across South Dakota — a local commercial or agricultural broker comp, or a direct site submission, will tell you far more than any statewide figure. Much of the land that would draw developer interest is farmland or ranchland; if that describes your parcel, our guide to selling farmland to data center developers covers rollback property taxes, water rights, and existing crop lease issues a generic land-sale guide skips. See also how much power a data center needs and why land near substations matters to value.
General information, not financial or legal advice.
Frequently Asked Questions
Is South Dakota an active data center market?
It's newly active and still small, anchored so far by one large, well-documented project. Gemini Data Center SD LLC, backed by a California-based family investment group, received city approval in October 2025 to annex roughly 160 acres northeast of Sioux Falls for a planned 500 MW facility, with construction targeted to start in 2026 and operation targeted for 2028, contingent on final rezoning and annexation approvals. That's a real, sizable commitment for the state, but it's a single-project market rather than a broad multi-developer pipeline like Ohio or Georgia — worth keeping in mind when sizing expectations for a given parcel.
Why would a developer choose South Dakota over a more established market?
Cold winters and no state corporate income tax are the two factors most often cited. Colder average temperatures support more hours of free-air cooling, which can meaningfully cut both energy and water use compared to a warm-climate site — a real operating-cost advantage, not just a marketing point. The absence of a state corporate income tax is a standing plus regardless of program specifics. Land costs are also generally lower than in saturated markets, though that advantage narrows quickly once a site requires significant new transmission or substation work.
What utility and grid infrastructure serves South Dakota data center sites?
It varies by location, so confirm the specific utility for any parcel rather than assuming statewide coverage. The Sioux Falls-area Gemini project sits near Xcel Energy's Split Rock substation and the Angus Anson power station, which is part of why that specific site can reportedly support up to 500 MW of capacity — proximity to that existing infrastructure, not raw acreage, is what makes it viable at that scale. Rural cooperative and municipal utility territory also covers meaningful parts of the state; see our guide to the <Link href="/grid-interconnection-queue-for-data-centers" className="text-green-700 hover:underline">interconnection queue</Link> for how the study process generally differs between investor-owned utilities and cooperatives.
Does South Dakota offer tax incentives for data centers?
Not a data-center-specific sales tax exemption as of the 2026 legislative session — lawmakers considered but rejected bills that would have exempted data center equipment and software purchases from sales tax during that session. That's a meaningful gap relative to the roughly 30 states that do offer some form of equipment exemption, and it's worth factoring into how a South Dakota deal compares to a similarly sized project in a state with an active incentive program. The state's lack of a corporate income tax stands regardless of that outcome. Confirm current program status before modeling a deal, since incentive legislation can be reintroduced in future sessions.
Can I submit land in South Dakota for data center consideration?
Yes. If you own or represent land in South Dakota near Xcel Energy or cooperative substation infrastructure, particularly in the Sioux Falls area or along I-90, submit it via our site intake form for a confidential review. No obligation.
Site Intake
Own or represent land in South Dakota?
Submit it for a confidential data center site review. No obligation.
Your information is reviewed privately. We only use submissions to evaluate potential fit and relevant opportunities.
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