December 7, 1979
Mr. Rodney C. Lefholz
Deputy State's Attorney
Pennington County Courthouse
Rapid City, South Dakota 57701
Official Opinion No. 79-43
Criteria for determination of agricultural land for assessment purposes
Dear Mr. Lefholz:
You have requested an official opinion from this office interpreting the provisions of SDCL 10-6-31.3, which reads as follows:
For tax purposes, land is agricultural land if it meets two of the following three criteria:
(1) At least thirty-three and one-third percent of the total family gross income of the owner is derived from production from the land, or the total value of agricultural production from the land produced or sold exceeds two thousand five hundred dollars in three of the last five years.
(2) It is devoted to the production of livestock, dairy animals, dairy products, poultry and poultry products, furbearing animals, fish, horticulture and nursery stock, fruit of all kinds, vegetables, forage, grains, or bees and apiary products. Any slough wasteland or woodland contiguous to or surrounded by other agricultural land shall be considered as agricultural land if it is under the same ownership or management.
(3) It consists of not less than five acres of unplatted land or is a part of a mangement unit of more than forty acres of unplatted land. However, the board of county commissioners may increase the general minimum acre requirement up to forty acres at their discretion.
In regard to the above statute, you have asked the following questions:
QUESTIONS:
1. If an individual is raising livestock on ten acres of unplatted land, does the statement “production from the land” in SDCL 10-6-31.3(1) mean that the ten acres must be able by itself to produce the feed needed to support the livestock as opposed to buying the feed and then merely using the land to feed the livestock on?
2. An individual has just purchased thirty-nine acres which was previously assessed as non-agricultural land and is now devoting this land to the production of livestock. He has owned the land for three years as of January 1, 1980. He has furnished income statements showing a gross income of over $2,500 for each of the three years he has owned the property. Based on this information and the fact that the land was assessed as non-agricultural land during the previous three years, can an abatement and refund be granted for the difference in tax dollars paid during the previous two years due to the fact that the land was assessed non-agricultural land then whereas now it appears that it should have been assessed as agricultural land?
3. What is to be considered livestock under SDCL 10-6-31.3(2); for example, one horse, one goat, one chicken?
4. Are tame rabbits sold to other individuals as pets or as food considered agricultural under the classification of furbearing animals in SDCL 10-6-31(2)?
5. Is “devoted to the production of . . . forage” simply the raising of plants such as grass, weeds, etc.? Would land that is lying idle with no obvious intention of future grazing but rather possibly being intended for development or speculation fall under the provisions of SDCL 10-6-31.3(2)?
6. If a parcel of land is platted and is less than forty acres, will it meet the requirements of SDCL 10-6-31.3(3)?
7. If an individual or corporation owns two hundred acres of land platted into two hundred one-acre lots, but the property at this time is developed no further than that a plat has been filed, and the individual or corporation also owns forty-two acres of unplatted land contiguous to the platted area, is the platted area considered a part of a management unit or more than forty acres of unplatted land? The property, both platted and unplatted, is contained in the same fenced area and is devoted to the production of forage.
8. If an individual owns twenty acres of platted land, but leases the property to an individual engaged in the business of agriculture, is the platted area then considered a part of a management unit of more than forty acres of unplatted land under SDCL 10-6-31.3(3)?
IN RE QUESTION NO. 1:
In my opinion § 10-6-31.3(1) contemplates an overall operation which is agricultural in nature and does not necessarily restrict itself to the geographical confines of the land. In other words, so long as the pursuits carried on on such land represent at least a third of the total family gross income or the agricultural production exceeds two thousand five hundred dollars in three of the last five years, the criterion is fulfilled. The fact that in producing on the land outside sources must be resorted to for feed, fertilizer and so forth, does not necessarily detract from the agricultural characteristics as long as the percentage or dollar amounts are met.
IN RE QUESTION NO. 2:
SDCL 10-6-31.3 has the effect of merely quantifying the approach to the determination of agricultural land. Your question presupposes an error on the part of assessing officials who made a determination over the past three-year period that the land should be non-agricultural. You have not stated, but I must assume, that the taxpayer did not appeal that classification decision to the appropriate board of equalization and therefore did not exhaust his administrative remedies. It would seem from the lack of facts in your question that it is probable that there was no payment under protest and suit to recover. It is my opinion, therefore, that the statute in this instance must be considered prospectively and the determination made currently by the assessing officials as to the agricultural character of the property. It is noted also that this particular fact situation does not come within the guidelines for the abatement of taxes under § 10-18-1 and unless the grounds for abatement come within one of the six categories listed therein the county commissioners may not take that action.
IN RE QUESTION NO. 3:
In my opinion a solitary animal would not be considered livestock under § 10-6-31.3(2) since it definitely takes more than one animal to be involved in the production of livestock.
IN RE QUESTION NO. 4:
It is my opinion that rabbits raised for food or fur production would qualify under § 10-6-31.3(2) but not those raised as pets. This would have to be considered also with one of the other criteria, either the dollar amount or the quantity of land involved, before definite classification could be made.
IN RE QUESTION NO. 5:
SDCL 10-6-31.3(2) has to do with an active operation. Land is not “devoted to the production of forage” by simply the raising of plants or grasses, if it is not intended that whatever is growing on the land be harvested and used. Idle land alone could not be classified agricultural since it is not being used for production.
IN RE QUESTION NO. 6:
SDCL 10-6-31.3(3) contemplates only unplatted land; therefore, a platted parcel of land less than forty acres would not meet the requirements of this section. The answer to your question is no.
IN RE QUESTION NO. 7:
Within the fact situation you have presented in this question, my answer is in the affirmative.
IN RE QUESTION NO. 8:
Providing the twenty acres of land are used by the lessee for agricultural purposes as is his other property, it is my opinion that this land would come within the definition of agricultural land under Section 10-6-31.3(3).
Respectfully submitted,
Mark V. Meierhenry
Attorney General
MVM:JD:esp
