December 29, 1994

Mr. Ronald D. Buskerud
Pennington County State's Attorney's Office
300 Kansas City Street
Rapid City, South Dakota 57701

OFFICIAL OPINION NO. 94-16

Abatement of Taxes

Dear Mr. Buskerud:

You have requested an official opinion of this Office based upon the following facts:

FACTS:

In 1992, the county director of equalization reviewed the classification of various agricultural parcels, sending out questionnaires to landowners. Mr. "X" did not return his questionnaire. His property was reclassified as non-agricultural for the 1993 assessment. Mr. "X" paid the 1993 taxes in 1994 when due, without protest. In June of 1994, Mr. "X" requested an abatement/refund under SDCL ch. 10-18 due to his requalifying for the agricultural classification in 1994 and his allegations that the property has always been agricultural. Mr. "X" was not before the county board of equalization in 1993 or 1994.

Based upon the foregoing facts, you have asked the following question:

QUESTION:

Is Mr. "X" entitled to an abatement/refund of his 1993 taxes?

Local and county boards of equalization have the authority toaddress not only the valuation of a particular parcel of property, but also the classification of that parcel as agricultural or non-agricultural. See SDCL <185><185> 10-11-16 and 10-11-26. The classification of a parcel of property as agricultural or non-agricultural is of significant importance when applying the school tax levy to the property. SDCL 10-12-31.

Under the facts presented, the property owner did not participate in the equalization process for either 1993 or 1994. Nevertheless, the property owner wishes to have an abatement pursuant to SDCL ch. 10-18, with the abatement presumably calculated on the difference in taxes if the property had been classified as agricultural, versus the non-agricultural classification applied by the county. Further, it does not appear that the property owner availed himself of the payment under protest and lawsuit for refund provision. SDCL 10-27-2; Riverview Properties, Ltd. v. State Board of Equalization, 439 N.W.2d 820 (S.D. 1989).

The statutory provisions for abatement are very specific:

Unless otherwise expressly provided, if any person against whom an assessment has been made or a tax levied, claims such assessment or tax or any part thereof to be invalid for any reason herein stated, the same may be abated, or the tax refunded if paid, and the board of county commissioners is authorized and empowered to abate or refund, in whole or in part, such invalid assessments or taxes in the manner hereinafter prescribed and in the following cases only:

(1) When an error has been made in any identifying entry or description of the property, in entering the valuation thereof or in the extension of the tax, to the injury of the complainant;

(2) When improvements on any real property were considered or included in the valuation thereof, which did not exist thereon at the time fixed by law for making the assessment;

(3) When the complainant or the property is exempt from the tax;

(4) When the complainant had no taxable interest in the property assessed against him at the time fixed by law for making the assessments;

(5) When taxes have been erroneously paid or error made in noting payment or issuing receipt thereof;

(6) When the same property has been assessed against the complainant more than once in the same year, and the complainant produces satisfactory evidence that the tax thereon for such year has been paid; provided that no tax shall be abated on any real property which has been sold for taxes, while a tax certificate is outstanding. [Emphasis added.]

SDCL 10-18-1. Unless an individual specifically comes within one of the six categories outlined above in SDCL 10-18-1, no abatement or refund of taxes is available under that section. I should also note that SDCL 10-18-1 is not mandatory ("the same may be abated, or the tax refunded if paid").

From the facts you have presented, it is clear that the property owner does not come within one of the six categories of SDCL 10-18- 1. The property owner is attempting to replace the equalization provisions of SDCL ch. 10-11 with the abatement provisions of SDCL ch. 10-18 because the property owner did not avail himself of the equalization provisions.

The South Dakota Supreme Court has examined this very issue several times. In Yusten v. Morrison, 103 N.W.2d 653 (S.D. 1960), the Court reaffirmed the rule "that before a taxpayer may apply for judicial relief from an alleged error in valuation he must exhaust his remedies before the boards of equalization empowered to correct the error." Numerous other South Dakota cases following this proposition were cited. Yusten, 103 N.W.2d at 655. Therefore, an equalization issue, such as valuation or classification, first must be brought before a local board of equalization empowered to decide those issues. SDCL <185><185> 10-11-16 and 10-11-26.

My predecessors also have addressed this issue and have uniformly stated that equalization issues (valuation, classification, etc.) are not grounds for an abatement or a refund. AGR 79-14; AGR 1955-56 p. 201, 202; AGR 1947-48 p. 39, 40; AGR 1923-24 p. 352.

To summarize, an individual seeking an abatement must specificallyfall within one of the six categories of SDCL 10-18-1. A person seeking redress for an equalization issue--either valuation or classification --must do so within the context of the equalization provisions of SDCL ch. 10-11. The abatement provisions of SDCL ch.10-18 are not available to contest the classification of a parcel of property.

MWB:DDW:mjj