PIERRE, S.D. – A Senate committee on Wednesday killed a proposal that would have reduced taxes for some ranchers.
The bill would have allowed ranchers, particularly those West River, to change the tax classification of land above 1,950 feet in elevation that’s remained grassland for 20 years.
Over a decade ago, lawmakers shifted ag taxes from production-based to a system based on soil types. Grassland carries a lower tax burden than cropland and some ranchers say they’re being taxed for land they’re unable to produce on.
Republican state Sen. Jessica Castleberry, of Rapid City, says current law places an unbalanced tax burden on the shoulders of a few thousand ranchers.
“Encouraging cropping land in high elevation with low precipitation, short growing season and classified as semi-arid is a bad idea regardless of how much revenue any state entity perceives it could receive from this kind of irresponsible decision making,” Castleberry says.
But, critics say House Bill 1039 would create a $12.5 million property tax shift to businesses and homeowners.
Governor Kristi Noem also opposed the legislation.
The bill was moved to the 41st day, essentially killing the legislation on a vote of 6 to 1.
