Provide a tax credit to limit the taxes due on property over the previous year.
Summary
SB101 creates a property tax credit for owners of real property when the total property taxes imposed on a parcel in the current year exceed 103% of the prior year’s total taxes. The credit is designed to cap year-over-year increases in property tax bills, while excluding increases that result from a local decision to exceed existing levy limits under state law. In practical terms, the bill would require county auditors to calculate and apply the credit after levies are spread across taxable property, reducing each taxing district’s share proportionally until the total tax due is brought back down to the 103% threshold.
The bill also limits eligibility. A property owner would not receive the credit if, in the prior year, the property changed use or classification, or if there was any addition or expansion to the property. Those exclusions appear intended to prevent the cap from applying to properties whose tax burden rises because of physical changes or reclassification rather than general tax growth. The measure would amend South Dakota’s property tax administration framework in chapter 10-13 and affect county auditors, treasurers, taxing districts, and real property owners statewide.
Impact
SB101 would add a new property tax credit mechanism to South Dakota law, effectively creating a statewide limit on annual property tax growth for qualifying real property. It would require county auditors to administer the credit and proportionally reduce taxes owed across taxing districts, while preserving taxes tied to voter- or locally approved levy overrides and excluding properties with recent changes in use, classification, additions, or expansions. The bill would directly affect property owners, county finance officials, and local taxing entities by constraining revenue growth on eligible parcels.
Sentiment
The available voting history suggests the bill had some support but did not advance, as it was tabled on a 7-0 vote. No committee transcript is available, so there is no recorded debate to indicate broader support or opposition. The tabling action implies the proposal was considered but set aside rather than moved forward, which may reflect unresolved policy or fiscal concerns.
Contention
The main points of contention likely center on the bill’s effect on local government revenue and the fairness of limiting tax growth across all qualifying properties. Local taxing districts may object because the credit would reduce collections even when their levies remain unchanged, while property owners are likely to favor the predictability and relief from sharp tax increases. Another likely issue is the bill’s exclusions for properties with changes in use, classification, additions, or expansions, which could create administrative complexity and raise questions about which parcels qualify. The carve-out for taxes resulting from local decisions to exceed levy limits also preserves local control in some cases, but may be viewed differently by supporters and opponents depending on whether they prioritize tax relief or local fiscal flexibility.