Tax assessments on ag land could face another set of changes

A farmer works in a corn field near Ortley. A South Dakota State University economics professor will recommend changes to the tax assessment system on agricultural land such as this later this fall. Farm Forum file photo by John Davis

PIERRE — A South Dakota State University faculty member gave the Legislature’s task force on agricultural land assessments an early look Tuesday at recommendations he’ll deliver to the panel for its next meeting Sept. 10.

Matthew Elliott, an assistant professor of economics, said he’s nearly finished two years of analyzing South Dakota’s system for valuing agricultural property for property tax purposes.

The Legislature began converting 10 years ago to counties taxing cropland and noncropland on potential highest and best use for the soil types on each piece of ground. The previous system used prices from some sales of comparable properties.

Elliott said he wants to add more information, such as weather, topography and expected revenue.

He said work was slowed somewhat because counties don’t take a uniform approach for assessment information.

Elliott plans to spread the word this fall through articles, interactive maps and graphics, Excel charts and software. He also wants the task force to consider requesting rewrites of some laws.

The state Department of Revenue, meanwhile, plans a series of workshops for county directors of equalization and their staffs who set property values for taxes.

The seminars will focus on adjustments that reduce ag land values when justified.

“We’ve got a lot of new directors in the state,” Mike Houdyshell said. He is a department official. “We think that’s really going to help.”

Houdyshell said the department also would look at software systems in counties to ensure adjustments were documented and proper.

Some landowners in Brown County have sued the county commission for being overtaxed under so-called production model the state now uses. The Department of Revenue has ruled that their ag land values were improperly adjusted upward.

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