2026 Tax Changes Explained: Key Updates, Deductions, and Refund Tips for Taxpayers

Northeast Radio SD News – South Dakota - South Dakota classifications by the county director of equalization: agricultural, owner‑occupied, or nonagricultural. While most local taxes are unaffected by classification, the newsletter emphasizes two major areas where it matters — how land is assessed and how much a property owner pays toward the School General Fund levy.

Three Property Classes Explained

Agricultural property includes land used primarily for farming or ranching for profit, along with most farm buildings used exclusively for agricultural purposes. Homes and residential garages do not qualify. No application is required unless a property owner believes their land has been misclassified.

Owner‑occupied property refers to a homeowner’s primary residence, including garages, residential outbuildings, and the associated land. To receive this classification, owners must either file an application by March 15 or complete the owner‑occupied section on the Certificate of Value form when purchasing a home.

Nonagricultural property includes all other land and structures that do not fall into the first two categories.

Why Classification Matters

The Department of Revenue notes two key impacts:

1. Assessment Method

·        Agricultural land is valued using the state’s Productivity System, which bases taxable value on the land’s ability to generate agricultural income.

·        Owner‑occupied and nonagricultural land are assessed at market value, reflecting what similar properties sell for in the open market.

2. School General Fund Levy

This is the most significant difference for taxpayers. State law sets different levy rates for each classification:

·        Agricultural: $1.051 per $1,000 of taxable value

·        Owner‑occupied: $0.669 per $1,000

·        Nonagricultural: $4.867 per $1,000

These rates apply only to the School General Fund. All other local taxes — county, city, township, fire district, ambulance district — use the same rate regardless of classification.

The Legislature sets maximum school levies annually as part of the State Aid to Education formula. Local districts receive funding through a combination of these levies and state aid.

Local Governments Not Affected by Classification Changes

The Department stresses that changing a property’s classification does not increase or decrease the amount of money counties, cities, or other local governments receive. Only the School General Fund levy varies by classification.

Statutory References

The newsletter cites several sections of South Dakota Codified Law governing property classification and taxation, including 10‑6‑110, 10‑6‑112, 10‑6‑119, 10‑6‑127, 10‑6‑132, 10‑12‑42, 10‑13‑39, and 10‑13‑40.

Read more local & state news at www.northeastradiosd.com/news

Subscribe to the DAILY newsletter & download the LOCAL online RADIO app - https://zurl.co/QipXd