South Dakota county cracks down on farmland classification

Farm Forum

RAPID CITY (AP) – Officials in a western South Dakota county have made it tougher for property owners to classify land as farmland amid concerns that some people are exploiting the label to save money on taxes.

Pennington County commissioners voted 3-1 on May 21 to set higher standards. The move could increase the taxes of 466 property owners and gain the county $1.6 million more in revenue.

“That’s like three or four Wal-Marts being built in our county,” Shannon Rittberger, county director of equalization, told the Rapid City Journal.

The county for years has been tracking people who abuse the system, Rittberger said. Recent cases have been particularly egregious, he said – including some in which owners of million-dollar summer homes in the Black Hills falsely claimed the homes were working farms. The false categorization slashed their tax bills in half, Rittberger said.

“It’s unbelievable how people will lie to you,” he said.

Previously, a property owner needed to meet two of three requirements: a third of a family’s gross revenue must come from agriculture, the principal use of the property in question is to grow crops or livestock for profit, and the property is larger than 40 acres.

The commissioners adjusted the final requirement so that a property owner must have at least 160 acres now.

Rittberger said he’s confident that small farmers won’t be affected because they could prove that their property met the other two requirements.

Commissioner Ron Buskerud said it’s unfair that some property owners have been able to avoid paying their share of taxes for so long.

Commissioners Ken Davis and Don Holloway also voted for the change. Commissioner Nancy Trautman was absent.

Chairman Lyndell Petersen was the sole dissenting vote. Petersen said that while some property owners have exploited the system, the commissioners should have spent more time considering whether 160 acres was the best minimum to set.