Countdown begins for new system of ag-land valuationPIERRE — County directors of equalization will be provided special training, and public forums will be held throughout South Dakota in the coming months, as South Dakota converts this fall to a new productivity-based system for setting the taxable values on agriculture property, an official for the state Department of Revenue and Regulation said Wednesday.
By: Bob Mercer, The Daily Republic
PIERRE — County directors of equalization will be provided special training, and public forums will be held throughout South Dakota in the coming months, as South Dakota converts this fall to a new productivity-based system for setting the taxable values on agriculture property, an official for the state Department of Revenue and Regulation said Wednesday.
The productivity system relies on soil classifications and is designed so that the taxable values of agriculture properties gradually increase or decrease, as prices and yields rise and fall on crop land, and cattle prices and cash rents go up and down for grazing land.
An Olympic-style averaging system will be used covering the most recent eight years of data, with the highest and lowest years disregarded and the remaining six years averaged.
The Legislature directed that the new production-valuation system take effect July 1 so it is used for setting taxes payable in 2011. The old approach relied on prices paid for land.
To soften the potential increases or decreases, the Legislature this year decided that the taxable valuation can’t change for any agriculture parcel by more than 10 percent annually for taxes payable in 2011 through 2017.
County directors will start using the system this year. They face a November deadline to initially set the property values that will be used for determining the taxes payable in 2011.
Michael Kenyon, director for the state Division of Property and Special Taxes, told a task force of legislators and citizens Wednesday that county directors will continue to have the authority to consider each property’s specific circumstances, such as crop ground which can only be grazed because of the terrain.
Kenyon said some tweaking is still needed. A rule dealing specifically with irrigated land likely is needed, he said, because a statewide approach hasn’t been found to accurately reflect the higher production from irrigable acres.
Cash-rent information also is changing shape, he said, because the federal survey is being done differently. His office needed to develop its own cash-rent data for 16 counties which weren’t covered in the latest federal survey.
Kenyon said he prefers the new cash-rent survey methods but there is inconsistency now in the eight years averaging.
“”It may cause our data to wobble a little bit. It is a better number,” he said.