March 7, 1991

Ronald D. Buskerud
Deputy State's Attorney
Pennington County
300 Kansas City Street
Rapid City, SD 57701

OFFICIAL OPINION NO. 91-07

Prepayment of Real Estate Tax

Dear Mr. Buskerud:

You have requested an official opinion concerning the following factual situation:

FACTS:

The Pennington County Treasurer's Office has received several requests from real property owners in Pennington County to prepay their real property taxes prior to January 1 of the year in which the real property taxes are due. The property owners are otherwise current in their real estate taxes, and for some reason, either absence from the county through May 1, or for income tax reasons, they desire to make payment of the real property taxes prior to the January 1 due date. Some requests have come prior to the Treasurer actually receiving the tax list from the County Auditor, and some requests have come after the Treasurer has received the tax list, but prior to January 1.

Based upon the above factual situation, you have asked the following question:

QUESTION:

May a county treasurer accept prepayments of real estate tax prior to January 1 of the year in which the real estate taxes are due?

DISCUSSION:

To answer the question presented, it is helpful to review the law regarding real property taxes within the state. Real property is assessed for taxation on the basis of its value on January 1. SDCL 10-6-2. After the property is assessed for valuation and tentative budgets are in place, the taxes are levied. SDCL 10-12-8.

After the taxes are levied, the county auditor makes a tax list indicating the amount of taxes to be collected per parcel. SDCL 10-17-1. The county auditor delivers this tax list to the county treasurer "on or before the first day of January following the date of the levy for the current year." SDCL 10-17-7. "All taxes shall become due on the first day of January of each year next following assessment, levy, or extension of the same ...." SDCL 10-21-4.

Turning to the duties of the county treasurer, the following statutes are pertinent:

SDCL 7-11-1. The county treasurer is the collector of taxes. He shall keep his office at the county seat. It is his duty to receive all money belonging to the county from whatever source derived and other money which by law is directed to be paid to him.

SDCL 7-11-4. The county treasurer shall be charged with the amount of all tax lists in his hands for collection and credited with the amounts collected thereon and the delinquent list.

Once the tax list is delivered from the county auditor to the county treasurer, the county treasurer is clearly charged with the collection of the taxes on the list. SDCL 10-17-9. It follows that a county treasurer would have no authorization to collect any taxes if the treasurer did not have the corresponding taxes due on a tax list. Since the requirement is that the tax list be delivered on or before January 1, a county treasurer may likely be faced with the situation of not receiving the tax list until late in the day on December 31, or possibly on January 1. Therefore, I am of the opinion that the county treasurer is without authority to accept payments of real property taxes due and payable on January 1 of a particular year prior to that January 1 date.

The opinion that I have rendered above also relieves the county treasurer of the difficulties in trying to account for all the various funds that go to the various tax lists. If prepayments were allowed, would the treasurer assign the prepayments to the 1989 tax list before the 1990 tax list arrives at the treasurer's office when the taxes are for 1990? The treasurer has the duty to collect all the taxes on the tax list and to keep track of the delinquent tax list. See SDCL 7-11-4. The prepayment taxes are not on the current tax list or the delinquent tax list. In fact, the treasurer may not know the tax amount. Therefore, it follows that there is, in reality, no tax list for the prepayment of taxes to attach until the new tax list arrives.

It must be noted that in certain cases prepayment of taxes is acceptable. Such prepayments are possible for a "mining operation, processing plant, electrical generating plant, or other industrial operation." SDCL 10-21-28. The prepayment of taxes in this situation occurs by way of a voluntary agreement. SDCL 10-21-29. Since your letter did not indicate the type of property that would be subject to prepayment, I assume that the property is not the type described in SDCL 10-21-28 and has no specific prepayment grant acknowledged in the Code.

To clarify, I am of the opinion that the county treasurer does not have the authorization to accept prepayment of taxes prior to January 1. While the county treasurer does not have authorization to accept the prepayment of taxes, I am of the opinion that the acceptance of prepayment of taxes is probably not an illegal act on the part of the county treasurer.

Respectfully submitted,

MARK BARNETT
ATTORNEY GENERAL

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