STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

October 8, 1971

Donald E. Erickson
Deputy States Attorney, Yankton County
Yankton, South Dakota 57076

OFFICIAL OPINION NO. 71-44

Penalty provided by 10-21-23 attaches when last day of month is a holiday

Dear Mr. Erickson:

You have requested my official opinion on the following factual situation:

The last day of the month recently fell on a Sunday and on the Monday following, several people came to the treasurer's office to pay their delinquent taxes. They protested the penalty, which by law is to be added to their taxes the first of each month, because the courthouse had been closed Saturday and Sunday, and for this reason they had been denied the right to pay their taxes before the first of the month.

They took the position that when the last day of the month falls upon a holiday, they could pay their taxes on the next business day without penalty and based their arguments on the following statutes:

SDCL 1-5-4: "Whenever any act of a secular nature other than a work of necessity or mercy, is appointed by law or contract to be performed upon a particular day, which day falls upon a holiday, such act may be performed upon the next business day with the same effect as if it had been performed upon the day appointed."

SDCL 1-5-1 declares Sunday to be a holiday.

You have asked if the day of grace provided by the above statute is applicable to the imposition of the penalty assessed against delinquent taxes by SDCL 10-21-23, which provides:

On the first day of May of the year after which taxes shall have been assessed, one-half of the unpaid real estate taxes shall become delinquent, provided, that all real estate taxes totaling twenty dollars or less shall be paid in full on or before April thirtieth, and on that day and on the first day of each and every month thereafter there shall be added as penal ties and interest on said delinquent taxes two- thirds of one per cent. If the other half is not paid by the first day of November of the same year, that also becomes delinquent and the same penalty and interest shall attach and in the same manner.

In my opinion, the day of grace does not apply to the penalty on delinquent taxes. In other words, if the last day of the month falls on a Sunday or other holiday, a person who did not pay his taxes until the first day of the following month, would be liable for the penalty. The reason for this, is that the day of grace applies only to duties which must be performed on a certain day. Days of grace were never intended as devices to allow debtors to escape paying interest. The day upon which a contract is to be performed may be delayed by a day of grace, but the interest on the contract will continue to accrue during the day of grace. Weems v. Ventress, 14 La. Ann. 265.

The duty of paying taxes commences on January 1 of each year. SDCL 10-21-4. The fact that penalties do not start accruing until May 1, in no way changes the date upon which taxes are legally due. See Casareto v. Johnson (1935) 63 SD 460, 260 NW 705. Days of grace in this instance apply only to the date upon which taxes are due, changing the due date from January 1st (a holiday) to January 2d. They do not apply to the date upon which the interest penalty is to begin.

I concur with the opinion of my predecessor reported in 1927-28 AGR 280, which stated:

The duty to pay the amount of taxes due is primarily imposed upon the tax payer. He has the privilege and the right to avoid the imposition of penalty by paying the whole or one-half of the amount of taxes due on or before the 30th day of April. If he elects to wait until April 30th and then finds he is unable to make his payment, it is clear that on the following day he will be required to pay the penalty of 1% and his misfortune will have been wholly due to his own procrastination.

As outlined in 61 AGR 28, a special exception exists for taxes which do not become delinquent until November 1st of each year. I concur with that opinion as it relates to that special circumstance only.

Respectfully submitted,

Gordon Mydland
Attorney General