Is “Ag Status” Right for You?Mindy Hubert

mindy.hubert@sdstate.edu

Doug Pavelbuttevistafarm@dishmail.net

Benefit of “Ag Status”• Can help lower your property taxes,

sometimes very significantly

– Depends on your county tax levy – Example:

$14 tax/$1000 assessed for ag landvs.

$16 tax /1000 assessed value for non-ag

Benefit of “Ag Status”• More significantly, depends on

how your property is assessed:– Non-ag (owner-occupied) vs. ag

property

Benefit of “Ag Status”• Non-ag property is assessed at

market value

• Ag property is assessed based on a productivity formula– Almost always significantly less than

Market Value• most notable on properties valued

high (Black Hills)

ExamplePropertyDescription

Assessment Tax

Wall or Black Hills,100ac

ag land @ $200/ac $200*100ac=$20,000*.014 (levy rate)=$280

Wall, 100ac non-ag @ $1000/ac

$1000*100ac=$100,000 *.016 (levy rate) =$1600

Black Hills, 100ac non-ag @ $5000/ac

$5000*100ac=$500,000 *.016 (levy rate) =$8000

Qualifying for Ag Status

• SDCL 10-6-31.3• Two of three following criteria

must be met:1. (State Requirement) Minimum of

20 acres owned• Counties can require up to

160 acres

Minimum Acreage SizeCounty Minimum Size

(ac)

Butte 145

Lawrence 41

Pennington 40

Meade 73

Custer 40

Fall River 160

Harding 160

Jackson 70

Criteria-continued2. 33.3% of total family gross income is

ag• Use gross ag income

– 1040 tax form to prove total non-ag income– Copy of schedule F to prove total ag

income–Only 1 year’s worth of proof needed

(Pennington)

Criteria-continued3. Acreage is devoted to: • Raising crops, timber or fruit trees

• Rearing, feeding, and management of farm livestock, poultry, fish, or nursery stock

• Production of bees and apiary products, or horticulture

• Horses generally not considered Ag (thought of as a tool to conduct ranch work)…like a ranch truck or border collie

Criteria• Hobby Ag vs. Production Ag:

o Principal use of the property is ag production with “Intent to produce income”

o A 40 acre property with a home, garage, and 20 sheep does not meet this criteria.

o A 40 acre property with a home, garage, and 200 head feedlot does.

Directors of Equalization: http://www.sdcounties.org/ Shannon Rittberger, Penningtonshannonr@co.pennington.sd.us 505 Kansas City StreetRapid City, SD 57701(605) 394-2175

Kirk Chaffee, Meade doe@meadecounty.org1300 Sherman St., Suite 222 Sturgis, SD 57785(605) 347-3818

Directors of EqualizationAllison Jensen, Custerajensen@custercountysd.com420 Mt Rushmore RdCuster, SD 57730 (605) 673-8170

Polly Odle, Butte polly@buttesd.org839 5th Ave.Belle Fourche, SD 57717(605) 892-3950

Directors of Equalization Terri Halls, Fall Riverfrdoe@gwtc.net906 N. River St.Hot Springs, SD 57747(605) 745-5136

Harding County410 Ramsland St.Buffalo, SD 57720(605) 375-3351

Directors of Equalization Tim Hodson, Lawrencethodson@lawrence.sd.us 90 Sherman StreetDeadwood, SD 57732(605)-578-3680

Kyle Helseth, Minnehahaequalization@minnehahacounty.org415 N. Dakota Ave.Sioux Falls, SD 57104(605) 367-4228

Directors of Equalization Haakon County140 S. HowardPhilip, SD 57567(605) 859-2627

Jackson County1 Main St. S.Kadoka, SD 57543(605) 837-2122

May Help Qualify for Ag Status (Pennington, Fall River, Custer)

• Tree Farm System http://www.treefarmsystem.org• 105 certified American Tree Farms in SD• Must have an approved Management Plan for property Inspections every 5 years• Can help prove Principal Use of acreage is Timber

• John Hinners, John.Hinners@state.sd.us South Dakota Department of AgricultureP.O. Box 940Huron, SD 57350-0940