June 17, 1986

Mr. Jon S. Flemmer 
Clark County State's Attorney 
Box 296 
Clark, South Dakota 57225

OFFICIAL OPINION NO. 86-21

Tax status of property of paraplegic veteran or spouse

Dear Mr. Flemmer:

You have requested an official opinion from this office in regard to the following factual situation:

FACTS: 

Mr. X of Clark, South Dakota, was a paraplegic veteran who received a tax exemption pursuant to SDCL 10-4-24.10 for taxes levied in 1976 and 1977 on certain real estate within Clark County, South Dakota.  This real estate qualified as paraplegic dwelling under SDCL 10-4-24.9.  Mr. X passed away on September 25, 1978, and subsequent thereto, Mrs. X applied for and received a tax exemption as an unremarried widow of a paraplegic veteran for taxes levied in the years 1978 through 1984.  In each of the years for which Mr. X received a tax exemption, a proper application for abatement of taxes was filled out in the following year, the exemption was granted by the Clark County Commissioners and the tax on the exempt property was abated.  Mrs. X continued to occupy the property for 1985; however, on August 3, 1985, she remarried and became Mrs. Y. Mrs. Y has now made application for an abatement of taxes levied on this property in 1985, based upon the property qualifying as exempt property of an unremarried widow of a paraplegic veteran and has asked that the abatement be prorated through August 3, 1986, the date of her remarriage.

Based upon the above factual situation, you have asked the following question:

QUESTION: 

Does SDCL 10-4-24.10 require that a dwelling or part thereof as provided in SDCL 10-4-24.9 be owned and occupied by the unremarried widow of a paraplegic veteran for the full calendar year in which a tax is levied before such property qualified for an exemption in that tax year, or must the county pro-rate the subsequent abatement according to the portion of the year during which the dwelling qualified for the exemption?

IN RE QUESTION:

The exemption in question is based on the type of structure which is involved, that is a dwelling which is specifically designed for use by a paraplegic as a wheelchair home.  That category was specifically classified for purposes of taxation under SDCL 10-4-24.9 in accordance with Article XI, Section 2 of the Constitution, giving the legislature the authority to classify property and determine which class should be taxable and which class not taxable.

Under normal conditions the date when the tax is levied becomes the determining date as to the exemption or taxability of the property.  McFarland v. Keenan, 1957, 77 S.D. 339, 83 N.W.2d 884.  Under certain conditions,  particularly those with respect to organizations claiming exemption under SDCL 10-4, §  10-4-19 and §  10-4-19.1, provide a specific rule as to the time when based on a transfer of the property from a non-exempt person to an exempt person or vice versa, the pro-rating takes place.  However, with respect to veterans and their unremarried spouses there is an entirely separate and distinct rule which is provided in §  10-4-24.10.  This rule requires that where a classified wheelchair house is involved to the extent that it is 'owned and occupied for the full calendar year in which the tax is to be levied' by either a paraplegic veteran or an unremarried widow or widower of such veteran, he or she is exempt from taxation.  Property is valued for tax purposes on January 1 of each year, SDCL 10-6-2.  Although the budgeting and tax levying process takes place at various times during the ensuing year, the effective date of the lien on the property is the first day of January of the year following that in which the taxes are assessed, SDCL 10-19-3.  Thus, the veteran or the unremarried spouse must have owned and occupied for the full calendar year subsequent to the assessment day when it qualified as a wheelchair home.

The answer to your question is that if on the first day of January of the year following that in which the taxes were assessed, the property was not owned by a person qualified under §  10-4-24.10 to claim the exemption, the property would continue to be taxable for that year and no abatement would be  applicable.  No pro-rating is provided for this particular category of property.

Respectfully submitted,

Mark V. Meierhenry
Attorney General