February 24, 1976
Mr. Peter J. Buttaro
Brown County State's Attorney
Brown County Courthouse
Aberdeen, South Dakota 57401
OFFICIAL OPINION NO. 76-25
Procedures for tax reduction of new structures under SDCL 10-6-35.1
Dear Mr. Buttaro:
You have requested my official opinion relating to SDCL 10-6-35.1 and 10-6-35.2 regarding the discretionary formula and reduced taxation of new structures and additions.
In this connection you asked the following questions:
1. Must the owner of property or structures covered under the above sections apply for tax relief by application or request before said relief is given?
2. If the answer to the above is affirmative; if an owner does not apply after the first tax year following construction but waits until the second or third tax year, may the Commission then apply paragraph 2 or 3 of SDCL 1O-6-35.2?
3. If there is no request by an owner for relief under this section and the County Commission, in its discretion, adopts the formula in whole or in part, does all similarly situated property in the County have to be given automatic relief under this section?
This law, by its terms, permits reduced taxation of certain property which qualifies in dollar amounts and type for not more than five years following construction, providing it also meets air and water pollution standards. The formula is discretionary with the county commissioners or, in certain instances, with the governing board of a municipality in that they may adopt it or not adopt it as they see fit and further, if adopted, they may modify the percentage reductions for each year following initial construction. If adopted, however, the formula must apply to all property coming within the definition classified by the Legislature for purposes of taxation, i.e., all new industrial, commercial and nonresidential and agricultural structures or additions to existing structures which new structures or additions have a true and full value of $30,000 or more.
As pointed out in 1971-72 AGR 226, "if the county commissioners adopt such a resolution they must allow the same relief to any structure and may not set classifications."
One of the duties of the assessor or director of equalization is contained in § 10-6-36, which requires him to actually view the real property, when practicable, for the purpose of determining tire value of the same. Where the assessor has actual knowledge of the improvements made, as in the case of the issuance of building permits by a county or municipality, there should be no difficulty in applying the formula. In the event there was no building permit, the assessor obviously would have to be made aware of the additions to the property before the reduction could be granted. Presumably, if he had not received notice of the improvement or addition or had not viewed the property, it would not be assessed. This could only be determined on a case by case basis.
It is my opinion, in answer to your question No.1, that an application or request for coverage under § 10-6-35.1, et seq. is not a prerequisite to eligibility for the reduced formula of taxation. It may be necessary to alert the assessor to the existence of the situation as to the property involved.
In answer to your question No.2, although question No. 1 is answered in the negative, it would be my opinion, that if for some reason, the property did not acquire a reduced valuation for tax purposes in one year nevertheless that value, unless appealed by the taxpayer, would constitute the correct value on the property. If thereafter it comes to the attention of the assessor, the appropriate percentage for the year of construction of the property, i.e., second, third, et cetera, should be applied at that time.
As to your question No.3, I would summarize by saying that the formula does not apply to all similarly situated property in the county once adopted by the commission or municipal governing body and the designated percentages apply automatically to all property which is known to come within the classification.
Respectfully submitted,
WILLIAM J. JANKLOW
ATTORNEY GENERAL
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