South Dakota Department of Revenue speaks with Haakon County Commission during special meeting
The Haakon County Commissioners met with representatives from the S.D. Department of Revenue (SDDOR) during a special meeting on Tuesday, February 4.
SDDOR Representatives Wendy Semmler, Program Manager (TIF, Levies or Opt Outs) and Amber Steinke, Assessments Specialist presented a slideshow titled “Property Tax 101” to the commission and those attending. The presentation touched on the property tax timeline, definitions of terms used in the tax assessment timeline, how to determine assessed value, how assessments are handled annually, the appeals process, how to measure accurate assessments, audit information, and how to determine tax burden equality.
Haakon County’s 2020 due in 2021 assessment level fell short of the minimum 85%. This would have placed the factor for taxation at 1.002 (100.2%), however, during the presentation, Semmler notified the commission that because of the good faith effort Director Bennett is showing in attempting to equalize and appropriately reassess the county, the SDDOR would allow for a factor of 1 (property will be taxed at 100%) for the 2020 due in 2021 tax year. It may be noted, when the threshold is met at the 85% or higher, the factor for taxation will lower.
Larry Gabriel, Haakon County local and former chairman of the South Dakota House Taxation Committee was present and asked questions regarding how property is assessed at market value. “I don’t think the same formula for in town should be used for someone that say, lives in the country,” he stated. Gabriel even offered his opinion of using cost less depreciation across the board, especially in a town like Philip where the market is harder to predict. Semmler seemed to agree and understand the points Gabriel made.
Semmler expanded on good/poor assessments as well as appeals. The goal is accurate assessments on all properties, not the same percentage change on all properties. For Haakon County’s 2020 due in 2021 tax year, it will reflect a reassessment of the City of Philip and a blanket 10% increase to all non ag structures and land. This is called a blanket assessment and is considered a poor practice with the SDDOR and can result in long-term valuation issues. However, in order to bring the county to the required 85%, this is necessary.
With IAAO, the SDDOR recommends three to seven years for a full reassessment cycle to occur. Haakon County started a reassessment plan in 2014. Though 2021 marks year seven for Haakon County, a full reassessment will not be achieved under the original plan. However, with additional full-time certified staff and the current reassessment plan that is being implented, it would appear the Haakon County Equalization office would be able to achieve a full reassessment without having one performed by an outside company at a hefty price tag.
The best practice at that point, in regards to correcting the issue, would be a countywide reassessment. It appears to be a three to five year wait before other counties can have a reassessment performed by an outside company, and it can prove quite costly to the county. Per Haakon County Director of Equalization, Rose Bennett, during the regular meeting following the special meeting, it is estimated it would cost Haakon County just shy of $300,000.
Commissioner Snook asked Semmler if it was the taxpayer’s responsibility to report damage done to taxable property. Semmler recommended taxpayers call the DOE office and request a physical assessment to be completed in that case.
City council member, Tricia Larson, asked if the county required building permits. Haakon County does not. The DOE office does mail out new construction permits with the assessment notices.
Semmler was asked by the Pioneer Review if a county of Haakon County’s size could be adequately assessed and reassessed properly with one full-time, certified employee. Semmler stated she cannot tell a commission what to do in regards to staffing.
Meeting minutes can be found in the Public Notices section of this issue.