STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL
August 15, 1968
Bruce D. Gillis
Commissioner of Revenue
Pierre, South Dakota 57501
OFFICIAL OPINION NO. 68-16
Powers of State Board of Equalization
Dear Mr. Gillis:
You have requested my official opinion as to the proper procedure to be followed by the State Board of Equalization in implementing the provisions of SDC 1960 Supp. 57.0419 as amended by Chapter 257, Laws of 1968. This amendment incorporated with the existing law is set forth below:
"57.0419 State Board of Equalization: general jurisdiction. The State Board of Equalization shall have power to equalize the assessment:
(1) Of all property between those counties wherein a school district or municipality lies partly in each, but only when the board of county commissioners of anyone of said counties makes request in writing for such equalization;
(2) Of all property between counties whenever a state levy is made pursuant to SDC 57.050l.
(3) Of all property between counties, which is assessed below the state average, but no increase shall exceed one percent of the assessed value of any class for each percentage point the valuation of such class is below the state average sales to assessment ratio, as such assessed valuation was finally determined for tax purposes the preceding year."
This law requires the State Board of Equalization to consider the current assessment of property in the state in comparison with the over-all sales to assessment ratio for the current year. This comparison is made between the sales ratio percent of each class of property compared to the over-all state ratio for all property. If a class of property as equalized by the County Board of Equalization for 1968 is found to be below the state average ratio for all property, the State Board is required to add to or deduct from the aggregate value of such class, that percent which will, in their judgment, raise that class to its proper proportionate value.
As a control on the State Board, and likewise to discourage a county from lowering classes of property in anticipation of State Board increases, the Legislature provided that no increase might exceed in dollars, the equivalent of one percent for each percent that class currently was below the present sales ratio for all property, when that percent was applied to the last years final assessed or taxable aggregate valuation of each class. In other words, if a county reduced the valuation of a class in 1968 from the 1967 valuation and the current level is below the state average, the maximum dollar amount increase is determined by multiplying the difference in percent of the current ratio of that class from the state average, by the last years taxable value, for example:
County X 1967 1968 1968
State Average
Class A 9,773,085 9,589,480 = 26.4% 42.0%
15.6 15.6 26.4
1,524,000* 1,495,950 15.6%
*The largest dollar increase which may be given, which is the equivalent of 15.89% of the lower 1968 value.
Where a county has raised property in a given class, even though the aggregate value still may be below an equivalent ratio factor with the state average, it will be necessary to determine if such local raise was greater than the State Board could have raised before the local effort, for example:
County Y 1967 1968 1968
State Average
Class A 12,000,000 16,000,000 = 33.0% 42.0%
9.0% 9.0% 33.0
1,080,000 1,440,000 9.0
It can here be seen that the maximum increase possible by the State Board would have been $1,080,000 for a total aggregate value in the given class example of $13,080,000. Since the local effort raised the class aggregate to $16,000,000, an increase of over $2,000,000 over what the State Board might have done, the State Board may not now further increase the aggregate value of this class.
Respectfully submitted,
Frank L. Farrar
Attorney General
