Republican Leaders Clash Over Data Center Tax Incentives in South Dakota

Senate Majority Leader accuses House Speaker of fear mongering about economic development

Feb. 6, 2026 at 7:39pm

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Republican legislative leaders in South Dakota publicly clashed on Thursday over data center tax incentives, with Senate Majority Leader Jim Mehlhaff accusing House Speaker Jon Hansen of fear mongering about economic development during a joint news conference at the Capitol in Pierre.

Why it matters

This dispute between top Republican lawmakers highlights the ongoing debate in South Dakota over the use of tax incentives to attract new businesses and industries to the state, with concerns being raised about the potential impact on taxpayers.

The details

The disagreement centered around proposed legislation that would provide tax incentives to data centers looking to set up operations in South Dakota. Senate Majority Leader Jim Mehlhaff argued that the incentives were necessary to remain competitive in attracting these types of high-tech businesses, while House Speaker Jon Hansen expressed concerns about the long-term costs to the state.

  • The clash between the Republican leaders occurred on Thursday during a joint news conference at the South Dakota State Capitol in Pierre.

The players

Jim Mehlhaff

Republican Senate Majority Leader in South Dakota who supports providing tax incentives to data centers.

Jon Hansen

Republican House Speaker in South Dakota who has expressed concerns about the potential costs of data center tax incentives.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident

The takeaway

This clash between top Republican lawmakers in South Dakota highlights the ongoing debate over the use of tax incentives to attract new businesses, with concerns being raised about the potential long-term costs to taxpayers.