Proposing and submitting to the voters at the next general election an amendment to the Constitution of the State of South Dakota, limiting to a flat rate the real property taxes.
SJR506 is a proposed constitutional amendment that would ask South Dakota voters to approve a new cap on real property taxes. The resolution would revise Article XI of the state constitution to establish a flat-rate limit on all ad valorem taxes on real property, beginning with taxes payable in 2028. Under the proposal, the maximum tax would generally be tied to either the property’s most recent sales price or the amount of tax due in 2020, whichever is greater under the bill’s formula, with a separate rule for the first year the cap applies.
After 2028, the bill would continue limiting annual property taxes so they could not exceed the greater of the prior year’s tax amount or a percentage of the property’s most recent sales price if ownership changes. The applicable percentage would be 1% for property owned by a South Dakota resident who lived in the state for at least half of the prior year, and 2% for property owned by a nonresident who did not meet that residency threshold. The measure would therefore create a constitutional tax cap that applies statewide and would override any inconsistent property-tax practices.
If adopted, SJR506 would directly affect state constitutional law and local property tax administration by constraining how much revenue can be collected from real property taxes. It would likely impact homeowners, landlords, agricultural landowners, and local governments that rely on property tax revenue for schools, counties, municipalities, and other public services. Because it is a joint resolution, it does not itself change statutes immediately; instead, it proposes a constitutional amendment that would take effect only if approved by voters at the next general election.
The available vote history suggests the proposal faced some resistance in committee. One vote on a do-pass motion failed 2-4, while a later motion to defer the bill to the 41st legislative day passed 5-2. That pattern indicates the measure had at least some support, but not enough consensus for immediate advancement. No committee transcript was provided, so the record does not show detailed arguments, but the vote history suggests the bill was somewhat contentious, likely because of its significant effect on property tax policy and local government funding.
Overall, the bill appears to be part of a broader property-tax limitation effort, with a strong taxpayer-relief theme and a corresponding concern about constraining local revenue sources. Its central policy question is whether South Dakota should constitutionally lock in a flat-rate cap on real property taxes based on sales price and residency status.
SJR506 would amend the South Dakota Constitution, specifically Article XI, to impose a statewide cap on ad valorem taxes on real property. If approved by voters, it would limit the amount of property tax that can be charged each year and would likely require state and local taxing authorities to adjust assessment and levy practices to comply with the new constitutional formula. The measure would affect property owners, local governments, and entities funded by property tax revenue, but it would not itself amend the statutory code unless implementing legislation were later enacted.
The limited voting record suggests mixed sentiment. The bill did not advance cleanly out of committee, as a do-pass motion failed, but a later motion to defer passed, indicating neither strong consensus for immediate passage nor outright rejection. The available materials do not include debate transcripts, so the broader discussion cannot be characterized in detail, but the vote pattern points to cautious or divided support around a major property-tax limitation proposal.
The main point of contention is the bill’s proposed constitutional cap on real property taxes and the way it would tie tax limits to sales price and residency status. Supporters would likely view it as a taxpayer-protection measure and a way to create predictability in property taxation, while opponents would likely worry about reduced local government revenue, pressure on school and municipal funding, and the fairness or administrability of a flat-rate cap. The residency-based 1% versus 2% distinction may also raise questions about equity and treatment of nonresident property owners.