January 15, 1976
Mr. Lyle Wendell
Secretary of Revenue
Capitol Lake Plaza
Pierre, South Dakota 57510
OFFICIAL OPINION NO. 76-4
Property assessments
Dear Mr. Wendell:
You have requested an opinion on the following questions:
SDCL 10-6-33 states that all property shall be assessed at its full and true value in money but only sixty per cent of such assessed value shall be taken and considered as the taxable value of such property.
QUESTION: May assessments be made at a given time and the full and true value established be used in several succeeding years until a reassessment is made with a new full and true established?
QUESTION: What officials are responsible for fixing the taxable value of property?
Property in South Dakota is to be assessed at the value in money it will bring in the judgment of the assessor, 10-6-33. Any person aggrieved by the action of the assessor has the right of review to several boards of equalization and finally to the courts, 10-11-17, 22, 26, 30, 42.
The county boards of equalization are charged with the duty of equalizing property by class while the State Board of Equalization may equalize between overlapping school districts where there is an appeal by any district against another and may raise by percentage points property below the state average, 10-11-47(3). So long as all of the property within a taxing district is uniformly reevaluated the constitutional guarantees of equal protection are met.
Where, however, it becomes necessary to extend this reevaluation process over a period of several years the danger of discrimination arises.
As the United States Supreme Court said in the case of Sunday Lake Iron Company v. Township of Wakefield, 247 U.S. 350, 38 S.Ct. 495, 62 L.Ed. 1154 (1918):
The purpose of the equal protection clause of the 14th Amendment is to secure every person within the states jurisdiction against intentional and arbitrary discrimination, whether occasioned by express terms of a statute or by its improper execution through duly constituted agents. And it must be regarded as settled that intentional systematic undervaluation by state officials of other taxable property in the same class contravenes the constitutional right of one taxed upon the full value of his property (citing cases). It is also clear that mere errors of judgment by officials will not support a claim of discrimination. There must be something more, something which in effect amounts to an intentional violation of the essential principle of practical uniformity.
In some instances cyclical reevaluations have been approved by the courts as in Johnson v. County of Ramsey, 187 N.W. 2d 675. In those instances the cycle is mandated by statute and the court specifically found that so long as property was uniformly evaluated within the taxing districts of the county the reassessment could be completed within a reasonable time. Two later cases pointed out the limited effect of Johnson holding it to the reassessment of an entire county and permitting review where unfairness and in equality is shown. Village of Barnsville v. Onischeck, 222 N.W. 2d 523; Ploetz v. County of Hennepin, 223 N.W. 2d 761.
As stated in Titus v. State Tax Commission, 132 N.W. 2d 647 (Mich., 1965). Various methods used in reevaluating property constituted a deprivation of the guarantee of uniformity of taxation. In Dore v. Kinnear, 489 P. 2d 898
(Wash., 1971), the court found that a four-year reevaluation program discriminated against those reevaluated where a substantial amount of the property in the county was not reevaluated in each year under a systematic reevaluation program.
The Supreme Court of South Dakota in Baken Park v. Pennington County, 79 S.D. 156, 109 N.W. 2d 898 in discussing discrimination pointed out at 162:
This court has recognized (In re Appeals of Jepsen, 76 S.D. 421, 80 N.W. 2d 76) that perfect uniformity of taxation is a dream unrealized and exact uniformity or mathematical accuracy in valuations are impossible, yet quoted with approval a statement to assess the property of one person or class at 40070, another at 30% and still another at 25070 without legislation under appropriate constitutional authority to so classify was the result of deliberation or intention, Sioux Falls Savings Board v. Minnehaha County, 29 S.D. 146, 165, 135 N.W. 689, 693. Constitutional uniformity is then lacking. Chicago R 1 & P Railway Co. v. Young, 60 S.D. 291, 244 N.W. 370.
The taxpayer discriminated against has the remedy to seek redress and reduction of his valuation to such amount as may be necessary to remove it, i.e., a common level of assessment. In re Appeals of Jepsen, 76 S. D. 421, 8 N.W. 2d 76.
The assessor or director of equalization has the responsibility for initially determining the full and true value of property. This is an annual responsibility. The assessor must complete the affidavits in the form prescribed by 10-6-40 and 10-6-42. The penalty for failure to comply is set forth in 10-3-38. This is not to say, however, that the assessor in the reasonable exercise of lawful discretion may not determine that the full and true value has not changed; subject to the appeal and review procedures discussed above. The answer to your first question is therefore a qualified Yes.
As to your second question. The determination of taxable value does not involve discretion. The Legislature by 10-6-33 has fixed the taxable value at 600/0 of the assessed value. This is a ministerial act, and while that section does not specify who is to perform it is the duty of the county auditor, 10-17-1, to prepare the tax list and extend the levies, 10-17-3. It is my opinion that the 60% taxable value is properly done by or at the discretion of the auditor.
Respectfully submitted,
WILLIAM J. JANKLOW
ATTORNEY GENERAL
WJJ:JD:dk
