If the South Dakota voters approve a constitutional amendment letting the legislature treat 'agricultural property' as a separate class for school tax purposes, does that mean a farmer's household goods (furniture, appliances, personal items) also get classified as agricultural property and taxed at the lower agricultural rate?
Plain-English summary
South Dakota's 1965 legislature passed two pieces that worked together to restructure how agricultural property was taxed for school purposes.
The first piece was Chapter 275 of the 1965 Session Laws (House Joint Resolution 6), a proposed constitutional amendment to Article VIII, Section 15 of the South Dakota Constitution. The existing constitutional text empowered the legislature to "classify properties within school districts for purposes of school taxation" and to "constitute agricultural lands a separate class." The amendment would change the word "land" to "property," broadening the legislature's reclassification authority to cover both real and personal agricultural property.
The second piece was Chapter 282 of the 1965 Session Laws, an amendment to SDC 1960 Supp. 57.0332 (as amended by Ch. 210 SL 1964) and SDC 1960 Supp. 57.0514 (as amended by Ch. 213 SL 1964) that would actually implement the reclassification. Chapter 282's effective date was contingent: it would only take effect after January 1, 1967, and only if the voters approved the constitutional amendment at the November 1966 General Election.
The AG's explanatory statement to the Secretary of State (for the ballot) made the legislative intent explicit: "The intent of the amendment is to empower the Legislature to constitute all agricultural property as a separate class."
A tax official asked the AG whether the term "agricultural property" would include household goods of farmers. The AG answered yes, on the following reasoning:
- Chapter 282 by itself did not include any definition of "agricultural property" that picked up household goods. But Chapter 282 was contingent on the constitutional amendment, so it had to be read in light of the amendment.
- The constitutional amendment, as the AG had explained on the ballot, empowered the legislature to treat "all agricultural property, personal property as well as real property" as a separate class.
- Read together with the constitutional amendment, "agricultural property" in Chapter 282 meant "all personal property of individuals engaged in the pursuit of agriculture," unless the legislature later narrowed the term.
- Household goods of an agricultural-pursuit individual fell within "all personal property" of that individual. So they would be reclassified along with the rest of the agricultural property.
In short, if voters approved the amendment in November 1966 and Chapter 282 took effect on January 1, 1967, farmers' household goods would be taxed at the lower agricultural rate along with their farm equipment, livestock, and farm-related real property.
Currency note
This opinion was issued in 1966. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. South Dakota's property tax classification system has been heavily restructured since 1966, including the eventual elimination of most personal property tax (which removed household goods from the tax rolls entirely) and various reorganizations of agricultural classification. The constitutional and statutory framework here is largely historical. Current property tax classification questions should be addressed under SDCL Title 10 (Taxation) and constitutional provisions as they currently stand.
What the opinion meant at the time
For county assessors who would have to implement the reclassification if voters approved, the opinion gave a working definition of "agricultural property": all personal property owned by an individual whose pursuit was agriculture. The reach was broad and included household goods, furniture, appliances, and similar items in a farm household.
For farmers, the opinion meant that approval of the constitutional amendment would result in a tax benefit not just for their farm equipment and farm-related real property but also for their household goods. The effective rate on personal items in a farm home would drop to the agricultural-class rate, which was generally lower than the rate for non-agricultural personal property.
For non-agricultural taxpayers, the opinion's reading meant the favored agricultural class was bigger than they might have expected. Households of people in agricultural pursuit would get the lower rate; households of people in non-agricultural pursuit would not. The shift moved some of the school tax burden from agricultural taxpayers to non-agricultural taxpayers (a politically contested feature of property tax classification in the 1960s and 1970s).
For voters evaluating the constitutional amendment, the AG's explanatory statement on the ballot put them on notice that the change would extend beyond "agricultural lands" to include all "agricultural property," including personal property. That was relevant to whether voters wanted to ratify the broader reclassification.
For school districts dependent on property tax revenue, the opinion previewed a redistribution effect. School taxes from agricultural taxpayers would generally drop after January 1, 1967 (if the amendment passed). School taxes from other classes would have to be adjusted (likely upward, or with non-property-tax revenue replacing the difference) to keep total school funding stable. The legislature would have to address that dynamic when implementing the new classification.
Common questions
Q: Did the voters actually approve the constitutional amendment in November 1966?
A: The opinion was issued in anticipation of the vote, so the result was not in the opinion's text. The historical record indicates the amendment was approved by voters, with Chapter 282 then taking effect on January 1, 1967.
Q: Could the legislature later narrow "agricultural property" to exclude household goods?
A: Yes. The AG's reading was that "agricultural property" meant all personal property of an agriculturalist "unless limited by the Legislature." The legislature retained authority to define the term more narrowly in subsequent statutory amendments, if it wanted to exclude household goods from the favorable agricultural class.
Q: How would an assessor decide whether a particular person was "engaged in the pursuit of agriculture"?
A: The opinion did not provide a test. Practical answers would have come from the assessor's local knowledge, from sworn statements in property tax returns, and from federal income tax categorization (Schedule F filers). The line between full-time farmers, part-time farmers, and rural non-farmers would have been a frequent source of dispute.
Q: What about livestock, farm equipment, and crops?
A: All of those were squarely "agricultural property" under any reading. The question in the opinion was the marginal one: did the favorable classification reach household goods too. The AG said yes.
Q: What about the farmstead house itself (as opposed to the land)?
A: The opinion focused on personal property (household goods inside the house) rather than the house structure itself. The structure would have been classified as real property, and its classification as agricultural or otherwise would have depended on how the legislature implemented the amendment for real property.
Q: How did the prior constitutional language differ from the amendment?
A: The prior language allowed the legislature to "constitute agricultural lands a separate class." That phrase was narrower: it covered only land (real property used for agriculture), not personal property used in agriculture. The amendment changed "land" to "property" to broaden the legislative authority to all forms of agricultural property.
Background and statutory framework
South Dakota's property tax system in the mid-1960s was built around classification: different classes of property could be taxed at different rates, especially for school tax purposes. The South Dakota Constitution's Article VIII, Section 15 was the source of the legislature's classification authority for school taxes.
By the mid-1960s, the agricultural community in South Dakota had been pushing for an expanded favorable classification. Agricultural land had been a recognized separate class since the prior version of Article VIII, Section 15. The push was to extend the favorable treatment to personal property used in or associated with agriculture.
The 1965 legislature responded with the two-piece package. Chapter 275 of the 1965 Session Laws (HJR 6) was the constitutional vehicle, putting the amendment on the November 1966 ballot. Chapter 282 of the 1965 Session Laws was the implementing legislation, amending SDC 57.0332 and 57.0514 to actually carry out the reclassification once the constitutional amendment was approved. The contingent effective date (January 1, 1967, contingent on voter approval) tied the two pieces together.
The AG's role in this opinion was twofold. First, the AG's explanatory statement on the ballot articulated the intent of the amendment so voters knew what they were voting on. Second, the AG's interpretation of "agricultural property" in this opinion gave assessors and taxpayers advance notice of how the term would be read once the amendment took effect.
The breadth of the AG's reading (all personal property of an individual engaged in agriculture) was a significant interpretive choice. A narrower reading (only personal property used directly in agricultural production) would have excluded household goods. The AG's broader reading favored agricultural taxpayers at the margin of the classification.
Citations and references
Constitutional provisions:
- S.D. Const. art. VIII, § 15 (legislative authority to classify properties within school districts for purposes of school taxation; agricultural lands as a separate class)
Statutes:
- Chapter 282 of the Session Laws of 1965 (amending SDC 1960 Supp. 57.0332 and 57.0514; classifications of property for tax purposes and mill levies; effective January 1, 1967, contingent on voter approval of HJR 6)
- Chapter 275 of the Session Laws of 1965 (House Joint Resolution 6; constitutional amendment to Article VIII, Section 15, changing "land" to "property")
- Chapter 210 of the Session Laws of 1964 (prior amendment to SDC 1960 Supp. 57.0332)
- Chapter 213 of the Session Laws of 1964 (prior amendment to SDC 1960 Supp. 57.0514)
Source
Original opinion text
Taxation. Interpretation of the term "agricultural property".
You have requested my official opinion as to whether or not household goods would be included in the definition of agricultural property provided in Chapter 282 of the Session Laws of 1965.
That Chapter is entitled, "An Act to amend Section 57.0332 of the 1960 Supplement to the South Dakota Code of 1939 as amended by Chapter 210 of the Session Laws of 1964 and Section 57.0514 of the 1960 Supplement to the South Dakota Code of 1939 as amended by Chapter 213, Session Laws of 1964 relating to classifications of property for tax purposes and the mill levies thereon." By its provisions, it would not become effective until after January 1, 1967 and then only in the event House Joint Resolution 6, Chapter 275, Session Laws of 1965 were to be approved by the electors of this state at the General Election in 1966.
Chapter 275 would amend Section 15 of Article VIII of the Constitution of this State in changing the word "land" to "property" thereby empowering the Legislature to classify property within school districts for purposes of school taxation, and allowing agricultural "property" to be constituted a separate class.
The explanatory statement furnished the Secretary of State for use on the ballots is set forth below:
"Explanatory statement by the Attorney General:
"Section 15 of Article VIII of the South Dakota Constitution provides that the Legislature is empowered to classify properties within school districts for purposes of school taxation, and may constitute agricultural lands a separate class.
"If the Constitution is changed by adoption of the proposed amendment then the Legislature will be empowered to constitute all agricultural property, personal property as well as real property, as a separate class of property for taxation.
"The intent of the amendment is to empower the Legislature to Constitute all agricultural property as a separate class."
Therefore, in answer to your question, I must state Chapter 282 Session Laws of 1965 would not in and of itself include household goods as agricultural property. It must be taken in context with Chapter 275, Session Laws of 1965. In my opinion, the term agricultural property, unless limited by the Legislature, means all personal property of individuals engaged in the pursuit of agriculture and would therefore include household goods.