PIERRE, S.D. – An innovative law in South Dakota has led to a significant decrease in farmland valuations, saving a remarkable $120.5 million. The law, referred to as SDCL 10-6-130, gives counties the power to change the classification of land from crop to non-crop based on soil types. This reclassification enables landowners to exempt their properties from property taxes if the soil is deemed unfit for farming due to severe limitations.
Lawmakers convened to evaluate the effectiveness of the law’s implementation, posing critical questions to the State Department of Revenue. The law empowers counties to assess soil quality, focusing on Class IV soils affecting crop growth. Wendy Semmler, Director of the Property Tax Division, led a comprehensive study to assess the law’s impact on farmland valuation across South Dakota counties.
Rep. Kirk Chaffee, who spearheaded the law, highlighted the advantages of this new legislation. Previously, individual parcel adjustments were a laborious process for land assessors. With the law now in effect, counties can swiftly re-designate all Class IV soils within their jurisdiction, simplifying the adjustment process on a larger scale.
The law allows counties to re-designate up to 20% of their crop land as non-crop land. So far, over 365,000 acres have been reclassified since the law’s enactment, resulting in a substantial statewide reduction in land value.
While the law has faced scrutiny, Semmler asserts that the system is functioning effectively and has successfully kept land values in check. However, Chaffee aims to refine the soil rating system further and welcomes suggestions for future legislation to improve the valuation process.
The Continued collaboration between the Department of Revenue and entities like South Dakota State University will contribute to a more accurate and equitable assessment of farmland values.
