Grass sways in the wind in western South Dakota. (Makenzie Huber/South Dakota Searchlight)
Current property tax laws penalize the maintenance of grasslands and incentivize their conversion to cropland, ranchers and conservation groups told state lawmakers Wednesday.
Property tax rates are applied to the assessed value of land. A productivity-based assessment model, adopted in 2009 to address rising ag-land taxes and fully implemented in 2019, assesses agricultural land based on the soil’s productivity.
Some people who testified to lawmakers Wednesday said that means grassland , which generally brings in less income, could be taxed on the potential of its soil to support crops, which generally bring in more income. And that situation results in unfairly high taxes on some grassland, which can push landowners to convert it to crops.
Tax discussion highlights tension between residential and agricultural property owners
The Legislature’s Study Committee on Property Tax Assessment Methodology heard testimony on the issue during a meeting in Pierre.