STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

September 9, 1968

Reed Hutchinson
State's Attorney, Beadle County
Huron, South Dakota 57350

OFFICIAL OPINION NO. 68-27

Authority of County Commissioners to compromise delinquent real property tax

Dear Mr. Hutchinson:

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

"Beadle County is the holder of Tax Sales Certificates upon certain real estate, with structure thereon, commonly known and described as the Marvin Hughitt Hotel, located in the City of Huron. It appears that the tax delinquency, including penalty and interest against the property in question, now approximates $80,000.00 and sufficient time has elapsed to permit Beadle County to commence tax deed proceedings to acquire title to subject premises.

"Huron Elks Lodge No. 444, the owners of the property in question, has decided to sell this property at public auction in September 1968 to the highest bidder.

"Prospective purchasers of the property have inquired of the Board of Beadle County Commissioners as to whether or not the County Commissioners have statutory authority at the present time, by way of settlement or compromise, to abate a portion of the delinquent taxes and penalty on such property."

The statute in question is SDC 57.0802 and provides the only authority for County Commissioners to abate or refund delinquent taxes.

Perhaps few subjects have been the cause of so many official opinions as the abatement of delinquent taxes. In 1955-56 AGR 69 the following statement was made:

. . . It is my opinion that the Board of County Commissioners, if such Board determines that a compromise is in the best interest of the county, has the authority to compromise and abate a portion of the delinquent taxes or penalty on the property in question.

"This authority is premised upon the fact that such property was bid in by the county for lack of other bidders at the tax sale and that one year has elapsed thereafter.

"It is further my opinion that the Board of County Commissioners should not exercise this authority to compromise and abate taxes solely upon the taxpayer's claim of excessive assessed valuation and a failure on his part to appear before the proper Boards of Equalization."

In a further opinion, 1951-52 AGR 396, my predecessor stated the matter as follows:

". . . It will be noted that the Board of County Commissioners is authorized to make a settlement or compromise in this case if it finds that the full amount of taxes including penalty and interest, extended and charged against the lots in question cannot be realized by the sale of property or otherwise. The sole question for the Board of County Commissioners to decide is what is for the best interest of the county. The purpose of the statute is not to give relief to a taxpayer who has neglected to pay his taxes but to get the best possible bargain for the County. The Board of County Commissioners would have no authority to accept the offer made by the taxpayer if it is less than the amount that could be realized by taking the tax deed and reselling the property at tax resale even if the property could not be sold for the full amount of taxes, penalty and interest. It is my opinion that the county has authority only to compromise the taxes in the specific instance enumerated in SDC 57.0801 and 57.0802; and that where any Board of County Commissioners compromise taxes without express legislative authority:

" '. , . It acts in excess of its jurisdiction and its actions will create no legal liability on the part of the county. See Pommarane v. Washabaugh County, 61 SD 422, 249 NW 734.' ''

The taxes so compromised in excess of express authority are recoverable in an action by, “... the county to recover back the tax paid." (State of South Dakota Employers Protective Association v. Codington County, 298 NW 674.) Also in this connection see the official opinion at 1945-46 AGR 243 and 1945-46 AGR 11.

As to the liability of the County Commissioners in not acting in the best of faith and making the contemplated compromise, see the opinion at 1941-42 AGR 469.

It is my present opinion and I concur in the above expressed opinions of my predecessors that unless the property would not realize at a tax sale the full amount of the taxes, penalty and interest now due against it that there is no authority in the County Commissioners to compromise the same and an attempt at compromise would not be in the best interest of the county and would be outside of their legal authority.

Respectfully submitted,

Frank L. Farrar
Attorney General