Roseland v. Faulk County Bd. of Equalization

• Decision Date: 21 August 1991
• Docket Number: No. 17258,17258
• Citation: 474 N.W.2d 273
• Parties: Bruce ROSELAND, et al., Plaintiffs and Appellants, v. The FAULK COUNTY BOARD OF EQUALIZATION, Defendant and Appellee.
• Court: South Dakota Supreme Court

Page 273

474 N.W.2d 273

Bruce ROSELAND, et al., Plaintiffs and Appellants, v. The FAULK COUNTY BOARD OF EQUALIZATION, Defendant and Appellee.

No. 17258.

Supreme Court of South Dakota.

Argued April 23, 1991.

Decided Aug. 21, 1991.

Rick Johnson, Johnson, Eklund & Abourezk, Gregory, for plaintiffs and appellants.

James M. Cremer, Bantz, Gosch, Cremer, Peterson & Oliver, Aberdeen, for defendant and appellee.

WUEST, Justice.

This is an appeal by ninety-four Faulk County taxpayers of their 1988 tax assessments. These taxpayers previously appealed their assessments to the Faulk County Board of County Commissioners sitting as the Faulk County Board of Equalization. The Board of Commissioners reduced the assessments by 5%, based upon the reduced precipitation received in western Faulk County. ¹ The taxpayers remained unsatisfied and appealed the decision to circuit court for a trial de novo. The circuit court approved of and adopted the five percent adjustment determined by the Board.

The taxpayers appeal to this court and contend (1) the trial court erred in refusing to rule whether or not the 1988 assessment valued their property above its actual value, (2) the assessment was not uniform as to property classified as agricultural, (3) the assessment failed to comply with statutory requirements, and (4) the assessment was inequitable. Because we reverse and remand this case on the first issue, we do not reach the taxpayer's remaining contentions.

FACTS

Beginning with the 1986 tax assessment, the Faulk County Director of Equalization utilized the Faulk County Soil Survey to assess agricultural land. ² As a result, assessed values of property in the southeast corner of the county decreased, while assessed values in the northwest increased. This occurred because the soil type in the southeast is sodium affected and therefore less productive than the soil type in the west.

In 1987, certain taxpayers from western Faulk County appealed their assessments to the State Board of Equalization. On August 20, 1987, the State Board issued an opinion which upheld the use of the soil survey method, but directed the County Assessor to take into consideration rainfall, rocks, trees, sloughs and slopes, and make appropriate adjustments relative to these factors.

In the fall of 1987, the County Assessor met with a representative of the Department of Revenue and a Department consultant. A field inspection was conducted, climatic data was reviewed and the rating for various soil types was re-examined. Following this review, the rating of several soil types was adjusted downward and an overall climatic adjustment was acknowledged, based upon a one inch average precipitation difference from the middle of the county to the western part of the county. Consequently, the Department of Revenue recommended a four percent climatic adjustment be used in future assessments.

For the 1988 assessment, the County Assessor used the new soil ratings; however, based upon a letter he received from the Secretary of the Department of Revenue, he did not include a climatic factor in the assessment. The assessments which resulted form the basis of this appeal.

DECISION

All property is to be assessed at its true and full value in money. SDCL 10-6-33. The factors considered in valuing agriculture land are set forth in SDCL 10-6-33.1: ³

In fixing the true and full value in money of property, under the provisions of Sec. 10-6-33, the value of agricultural land as defined by Sec. 10-6-31, and which has been used primarily for agriculture use for at least five successive years immediately preceding the tax year for which assessment is to be made shall be based on consideration of the following factors:

(1) The capacity of the land to produce agricultural products as defined in Sec. 10-6-33.2;

(2) Soil, terrain, and topographical condition of property;

(3) The present market value of said property as agricultural land as determined by the factors contained in subdivisions (1), (2), (4) and (5) of this section;

(4) The character of the area of place in which said property is located; and

(5) Such other agricultural factors as may from time to time become applicable.

In the case of land producing crops or plants, the capacity of the land to produce agricultural products is to be based upon average yields under natural conditions. SDCL 10-6-33.2.

Notwithstanding the enumerated criteria of SDCL 10-6-33.1, "the valuation of property for taxation purposes shall never exceed the actual value thereof." S.D. Const. art. XI, Sec. 2. Accord Kindsfater v. Butte County, 458 N.W.2d 347, 350 (S.D.1990); Codington County Bd. of Comm'rs. v. State Bd. of Equalization, 433 N.W.2d 555, 557 (S.D.1988).

The terms "actual value" and "true and full value" mean the "market value" of property to be assessed and market value has been defined as the price ... a purchaser willing but not obligated to buy would pay an owner willing but not obligated to sell, taking into consideration all uses to which the property is adapted and might in reason be applied.

Rau v. Fritz, 81 S.D. 311, 314, 134 N.W.2d 773, 775 (1965) (citing Sheraton-Midcontinent Corp. v. County of Pennington, 77 S.D. 554, 95 N.W.2d 892 (1959) and Tidball v. Miller, 72 S.D. 243, 32 N.W.2d 683 (1948)). See Bailey v. Megan, 102 F.2d 651 (8th Cir.1939); Mortenson v. Stanley County, 303 N.W.2d 107 (S.D.1981); Yadco, Inc. v. Yankton County, 89 S.D. 651, 237 N.W.2d 665 (1975); In re Appeals of Jepsen, 76 S.D. 421, 80 N.W.2d 76 (1956); Williams v. Stanley County Bd. of Equalization, 69 S.D. 118, 7 N.W.2d 148 (1942). The assessor's valuations are presumed correct, Codington, 433 N.W.2d at 559; Mortenson 303 N.W.2d at 110, and appealing taxpayers bear the burden of overcoming this presumption, Knodel v. Bd. of County Comm'rs, 269 N.W.2d 386, 389 (S.D.1978); Yadco, 89 S.D. at 656, 237 N.W.2d at 668.

At trial, the taxpayers introduced into evidence three agricultural land sales from western Faulk County in 1987. These sales were considered "arms-length" transactions by the County Assessor and the Department of Revenue and were used in making the 1988 assessment. These sales also demonstrate that in at least three instances the assessed value of Faulk County agricultural property exceeded its actual value. We set forth the sales below:

                Date of Sale  Sale Price  1988 Assessed Value
                  3/24/87      $35,040         $ 73,785
                  11/16/87     $62,000         $106,640
                  12/29/87     $57,600         $103,245
                ----------
                

We find the taxpayer's evidence sufficient to overcome any presumption that the assessor's valuations were correct, particularly since these very sales were used in arriving at the 1988 assessment.

When excessive valuation has been shown, the property owner is entitled to relief without also demonstrating that a reduction is necessary to effect uniformity with other property of the same class. Knodel, 269 N.W.2d at 389; Appeals of Jepsen, 76 S.D. at 423, 80 N.W.2d at 77; Williams, 69 S.D. at 121, 7 N.W.2d at 150. The trial court made no findings or conclusions as to whether or not any of the 1988 tax assessment valuations exceeded the actual value of the land. Taxpayer's evidence quite clearly raises this issue. Accordingly we reverse the trial court's decision for a determination on this question as to each taxpayer. Under our holding, we deem it unnecessary to address taxpayer's remaining contentions.

We reverse and remand.

MILLER, C.J., and SABERS and AMUNDSON, JJ., concur.

HENDERSON, J., concurs specially.

HENDERSON, Justice (specially concurring).

Circuit Judge Evans, who decided this case, is no longer on the Bench so another circuit court judge will be picking up the pieces in this tax appeal, to decide it under the settled law of this state.

Little heed was given to the important decisions of this state by the trial court. Rather, the domineering dictates of the South Dakota Department of Revenue, as exemplified by correspondence in this file, was elevated over the State Constitution and the previous decisions of the South Dakota Supreme Court. Also, and regretfully, the circuit court became caught up in scientific, bookworm, technical construction of land values by an assessment "Bible," which led the trial court astray.

I hope, for the sake of all South Dakota citizens, that the circuit court judges of this state begin to realize that statutes cannot change our State Constitution; that manuals...