A Lawrence County assessor accidentally added an extra zero to a property's valuation sometime before 1962, making the value appear as $27,900 instead of $2,790. The error went undetected through 1969 tax years. When the taxpayer applied for an abatement and refund in August 1971, the county commissioners approved refunds for 1964-1969 but refused to refund earlier years because of the six-year statute of limitations. Was the statute of limitations a valid bar?

Plain-English summary

A property owner in Lawrence County had been overpaying property taxes for years because the County Assessor's office had made a clerical error in the valuation: the property's true value was $2,790, but the assessor entered $27,900 (adding an extra zero). The error originated sometime before 1962 and continued through 1969 tax years.

In August 1971, the property owner discovered the error and applied for abatement and refund of the overpaid taxes. The Lawrence County Commissioners approved the abatement for 1964-1969 (the most recent six tax years), but refused to refund taxes for any earlier years, citing a six-year statute of limitations.

Lawrence County States Attorney Jon Mattson asked the AG whether the six-year limitations period applied to this kind of abatement.

The AG ruled the limitations period did not apply. The reasoning had two parts:

Part 1: Was the error covered by SDCL 10-18-1(1)? The statute authorized abatement when "an error has been made in any identifying entry or description of the property, in entering the valuation thereof or in the extension of the tax, to the injury of the complainant." The AG concluded the ten-times overstatement was an entering-the-valuation error within the statute's scope. He cited a 1949-50 AG opinion at AGR 116 (his predecessor's view that a valuation "so ridiculously out of line with its true value" could be treated as an entering-error, even when the technical cause was assessor overvaluation). Where two hogs were assessed at $2,615 apiece in the 1949-50 example, abatement was appropriate; the Lawrence County situation was similar in kind.

Part 2: Did the six-year statute of limitations bar refund of the earlier-than-1964 taxes? The AG ruled no. The Constitution (Article XI, Section 2) prohibited assessing property at more than its actual value. A tax based on a clearly unconstitutional valuation was illegal from the beginning, not just procedurally defective. No statutory limitations period could operate as a bar to abating an illegal tax. The AG cited a line of authorities: 1949-50 AGR 302 (property exempt by Constitution but taxed could be refunded despite six-year limit), 1918 AGR 77, 1930-31 AGR 761, 1945-46 AGR 142 and 326, and 1947-48 AGR 281, all supporting the principle that illegal taxes are refundable without time limit. And the South Dakota Supreme Court in Williams v. Stanley County, 69 S.D. 118, 7 N.W.2d 148, had held that the constitutional provision and the assessment statutes gave the taxpayer the right not to have property assessed beyond actual value, with relief available when excessive valuation was shown.

The AG also addressed a procedural question. Even though the taxpayer had voluntarily paid the taxes and had not appealed to the local boards of equalization at the time, those omissions did not bar abatement. The South Dakota Supreme Court in Casey v. Butte County, 52 S.D. 334, 217 N.W. 508, had held that taxpayers had concurrent remedies: direct appeal to the board of equalization, payment under protest and suit to recover, or application for refund under certain conditions (as in this case). The taxpayer's choice of the refund route, even after years of voluntary payment, was permissible.

The bottom line: Lawrence County had to refund all years of overpayment, going back to when the assessor's error first took effect, not just 1964-1969.

Currency note

This opinion was issued in 1972. 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 abatement framework in SDCL Chapter 10-18 has been amended several times since 1972, with revised procedures for assessment correction, board of equalization appeals, and refund authority. The Williams v. Stanley County principle (assessment beyond actual value violates the Constitution) remains a foundational rule, but the procedural mechanisms for vindicating it have changed. Modern property owners facing assessment errors should consult current SDCL Chapter 10-18 and Department of Revenue guidance rather than this 1972 opinion.

What the opinion meant at the time

For Lawrence County, the opinion required the commissioners to expand the refund. The taxpayer was entitled to recovery for every year the erroneous valuation had been used, going back potentially nine or more years (from sometime before 1962 through 1971). The county's six-year cutoff had no legal basis.

For other South Dakota counties facing similar assessor errors, the opinion supplied a clear rule: a clearly excessive valuation (one that violated the constitutional cap) was illegal at the outset and could be corrected at any time. The traditional six-year cutoff for routine tax claims did not apply.

For property owners discovering long-standing assessment errors, the opinion was protective. They did not need to have promptly appealed to the local boards of equalization or paid under protest. They could come forward years later with proof of the error and recover for all years affected. Their voluntary payment in earlier years was not waiver.

For county assessors, the opinion was a reminder that clerical errors had open-ended financial consequences for the county. A single misplaced decimal could trigger refund obligations decades later if uncovered. Assessors had to maintain accurate records and double-check valuations against actual property characteristics.

For county commissioners deciding abatement applications, the opinion provided a framework: distinguish "merely excessive" valuations (which might or might not get relief depending on whether they crossed the constitutional line) from "grossly excessive" valuations that no reasonable assessor would have arrived at. The latter were definitely correctable; the former depended on factual showing.

For states attorneys advising counties, the opinion made clear that the six-year statute of limitations was not a safe defense against well-founded refund applications. Counties facing abatement requests had to investigate the merits, not just count back six years.

Common questions

Q: What was the constitutional basis for treating excessive valuations as void from the beginning?
A: Article XI, Section 2 of the South Dakota Constitution provided that "the valuation of property for taxation purposes shall never exceed the value thereof." This was a substantive constitutional rule, not just a procedural one. A tax extended against a valuation that exceeded actual value was based on an invalid valuation, and an invalid valuation made the tax invalid. The constitutional provision created a continuing right not to be taxed on a fictitious valuation, which a statutory limitations period could not extinguish.

Q: What if the assessor's error was not a clear clerical mistake but a debatable judgment call?
A: The opinion's reasoning targeted gross, easily-identifiable errors (ten-times overstatement, two-hogs-at-$2,615-each). For valuation disputes that turned on debatable judgment (was the property worth $50,000 or $75,000?), the appropriate remedy was a timely appeal to the local board of equalization or payment under protest with suit. The constitutional-violation theory required showing the valuation was clearly outside the range of reasonable judgment.

Q: Could the taxpayer recover interest on the overpaid taxes?
A: The opinion did not address interest. South Dakota's tax refund framework historically did not provide for interest on refunds in the absence of express statutory authority. The taxpayer in this case would likely have received only the principal refund, not interest.

Q: What if the assessor's error had been to overvalue by only 50% rather than 900%?
A: The 50% overvaluation case is harder. It is excessive enough to violate Article XI, Section 2, but might fall within the range of assessor discretion where reasonable people could differ. The AG's opinion suggested that "mere excessiveness" might not provide abatement relief, but "ridiculous" overstatement clearly did. Cases falling in between would be fact-specific.

Q: Did the taxpayer have to prove fraud or intentional misconduct by the assessor?
A: No. The opinion treated the assessor's error as a clerical mistake (extra zero), not an intentional act. The constitutional violation flowed from the result (taxation beyond actual value), not from the assessor's state of mind. Whether the error was negligent, accidental, or intentional was irrelevant to the abatement right.

Q: Could the county recover any payment the taxpayer had made in voluntary error (e.g., paying twice)?
A: The opinion did not address voluntary payments of the same tax twice. South Dakota's general rule on voluntary overpayment of taxes was that money paid by mistake of fact could be recovered, while money paid by mistake of law generally could not. But this case did not involve double payment; it involved overpayment because the underlying valuation was wrong.

Q: Did the AG address what happened if the assessor had used the overstated valuation by accident but the property had risen in value over time?
A: No. The opinion analyzed a static error in valuation, not a properties-that-appreciated scenario. If the property's actual value had risen to nearly $27,900 by 1971 due to market appreciation, the AG's reasoning would suggest abatement only for the years when the actual value was substantially below the assessed value. The constitutional cap is tied to actual value at the time of the assessment, not original value at the time of the error.

Background and statutory framework

South Dakota's property tax system in the late 1960s and early 1970s operated through county assessors, who determined property values, and county commissioners (sitting also as boards of equalization), who reviewed valuations and made adjustments. The state Department of Revenue oversaw assessment standards and equalization across counties.

Article XI, Section 2 of the South Dakota Constitution imposed a substantive limit on property taxation: the valuation could never exceed the actual value. This was an old constitutional provision, dating to 1889, and had been interpreted consistently to mean what it said.

SDCL 10-18-1 (formerly SDC 57.0801) provided for abatement in specified categories of cases:
- Subdivision 1 (the relevant one here): "When an error has been made in any identifying entry or description of the property, in entering the valuation thereof or in the extension of the tax, to the injury of the complainant."
- Other subdivisions covered exempt property mistakenly taxed, double assessments, and similar errors.

The general statute of limitations for tax claims in South Dakota was six years (presumably under SDCL 15-2-13 or its predecessor). But the AG's opinion treated this limitation as inapplicable to abatement of taxes that were illegal from the beginning, on the theory that an illegal tax does not become legal merely by lapsing time.

The principle that constitutional violations defeat statutory limitations has roots in the common-law concept that void acts cannot be cured by lapse of time. Courts and AGs have long applied this principle to exempt taxpayers from time limits when the underlying tax was constitutionally void.

The Williams v. Stanley County case was particularly important. The South Dakota Supreme Court had held that a taxpayer had a substantive right under the Constitution not to be over-assessed, and that this right was independent of procedural mechanisms for challenging assessments. So even a taxpayer who had not appealed timely could vindicate the substantive right later.

Casey v. Butte County had established the principle of concurrent remedies. The taxpayer could choose among (a) timely appeal to the board of equalization, (b) payment under protest with suit, or (c) later application for abatement under the statute. The choice was the taxpayer's, and failure to use the first two did not waive the third.

The 1949-50 AG opinion at AGR 116 (cited by Gordon Mydland in the 1972 opinion) was the immediate precedent for treating ten-times overstatement as an "entering" error. That opinion had analyzed the two-hogs-at-$2,615-each scenario and found relief appropriate.

The AG's overall framework was: the Constitution sets the substantive rule (no taxation beyond actual value); SDCL 10-18-1 provides one of several procedures for vindication; and the statute of limitations does not bar correction of constitutionally void taxes.

Citations and references

Constitution and statutes:
- S.D. Const. Art. XI, § 2 (valuation cap)
- SDCL 10-18-1(1) (abatement for entry, description, valuation, or extension error)
- SDC 57.0801(1) (predecessor statute)

Cases:
- Williams v. Stanley County, 69 S.D. 118, 121, 7 N.W.2d 148
- Casey v. Butte County, 52 S.D. 334, 338, 217 N.W. 508

Prior AG opinions:
- 1918 AGR 77
- 1930-31 AGR 761
- 1945-46 AGR 142, 326
- 1947-48 AGR 281
- 1949-50 AGR 116 (ten-times overstatement as entering error)
- 1949-50 AGR 302 (constitutional exemption refund despite six-year limit)

Source

• Landing page: https://atg.sd.gov/OurOffice/OfficialOpinions/opinionhtml.aspx?id=1659
• Original PDF: https://atg.sd.gov/OfficialOpinions/Official%20Opinion%2072-32.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

OFFICIAL OPINION NO. 72-32

Application for abatement of taxes.

STATE OF SOUTH DAKOTA
OFFICE OF THE ATTORNEY GENERAL
June 2, 1972

Jon Mattson
States Attorney, Lawrence County
Deadwood, South Dakota 57732

Dear Mr. Mattson:

You have requested my official opinion on the following factual situation:

The Lawrence County Assessor's office made an error in the valuation of a taxpayer's property some time prior to 1962, which error appeared through 1969 taxes. The property was valued at $2,790 and the Assessor added another zero to make the value $27,900. The taxpayer in August, 1971, applied for an abatement or refund of taxes on the ground that an error had been made in an identifying entry or description of the property, in entering the valuation thereof or in the extension of the tax, to the injury of the complainant.

Lawrence County Commissioners have okayed the abatement for the years 1964 through 1969, but have denied any abatement prior to that time because of the six year statute of limitations.

Concerning these you have inquired:

Is there a statute of limitations applicable to the above factual situation?

Article XI, Section 2 of the State Constitution provides that "... The valuation of property for taxation purposes shall never exceed the value thereof." SDCL 10-18-1 authorizes, in certain instances, the granting of relief where an assessment has been made or a tax levied which is invalid for any of the reasons stated therein. Subdivision 1 provides:

When an error has been made in any identifying entry or description of the property, in entering the valuation thereof or in the extension of the tax, to the injury of the complainant; ...

In the facts you have cited there appears to be an error of over $25,000 in the entering of the valuation of this property. This fact is not disputed by any of the parties. In a similar instance my predecessor held in 1949-50 AGR 116:

It is my opinion that a situation could exist where property is assessed by the assessor in an amount which is so ridiculously out of line with its true value that relief may be granted on the theory that it must be assumed that there was an error made "in entering the valuation thereof" within the meaning of SDC 57.0801(1), SDCL 10-18-1(1). It is my opinion that the taxpayer is entitled to an abatement of a tax extended against him, in the face of such an erroneous assessment as in the case of your example 2 (there, two hogs were assessed at $2,615 apiece.)

In some instances it has been held that the mere excessiveness of a valuation does not provide opportunity for relief under the particular abatement statute. However, I believe this must be taken as it appears in each individual situation and I find here that there is such excessive valuation as to constitute an erroneous entry justifying relief under 10-18-1.

As to the direct question of the period of limitations, I would call your attention to 1949-50 AGR 302 herein. It was held that property which was made exempt by the Constitution, but nevertheless taxed, could properly receive an abatement and refund, in spite of the six year statute of limitations as has been generally held for the refund of taxes, 1918 AGR 77; 1930-31 AGR 761; 1945-46 AGR 142, 326; 1947-48 AGR 281. No period of statutory limitation can operate as a bar to the right to abate taxes which were illegally levied and assessed. Any tax which is illegal from the beginning, cannot ripen into a legal tax by mere lapse of time.

Our Supreme Court has held in the case of Williams v. Stanley County, 69 S.D. 118, 121, 7 N.W. 2d 148, that the above quoted provision of the Constitution and the statutes relating to assessments provide a right to a taxpayer not to have his property assessed in excess of the actual value of the property taxes, and then where such excessive valuation is shown the owner is entitled to relief on the same.

It is my opinion, therefore, that where property has been assessed in excess of its actual value in violation of Article XI, Section 2 of our Constitution, that the statute of limitations will not operate as a bar to the action of the county commissioners in refunding taxes based on such illegal valuation.

I should note also that although these taxes were voluntarily paid and the taxpayer did not exercise his right to appear before the boards of equalization, our court has held that there are concurrent remedies under the law which allow either a direct appeal to board of equalization, a payment under protest, and suit to recover, or an application for refund under certain conditions, as here. See Casey v. Butte County, 52 S.D. 334, 338, 217 N.W. 508.

Respectfully submitted,

Gordon Mydland
Attorney General