Is “Ag Status” Right for You? Mindy Hubert Doug Pavel

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 land vs. $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)

Example Property Description AssessmentTax Wall or Black Hills, 100ac ag $200/ac$200*100ac=$20,000*.014 (levy rate) =$280 Wall, $1000/ac $1000*100ac=$100,000 *.016 (levy rate) =$1600 Black Hills, $5000/ac $5000*100ac=$500,000 *.016 (levy rate) =$8000

Qualifying for Ag Status SDCL 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 Size CountyMinimum Size (ac) Butte145 Lawrence41 Pennington40 Meade73 Custer40 Fall River160 Harding160 Jackson70

Criteria-continued % 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-continued 3.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: Shannon Rittberger, Pennington 505 Kansas City Street Rapid City, SD (605) Kirk Chaffee, Meade 1300 Sherman St., Suite 222 Sturgis, SD (605)

Directors of Equalization Allison Jensen, Custer 420 Mt Rushmore Rd Custer, SD (605) Polly Odle, Butte 839 5th Ave. Belle Fourche, SD (605)

Directors of Equalization Terri Halls, Fall River 906 N. River St. Hot Springs, SD (605) Harding County 410 Ramsland St. Buffalo, SD (605)

Directors of Equalization Tim Hodson, Lawrence 90 Sherman Street Deadwood, SD (605) Kyle Helseth, Minnehaha 415 N. Dakota Ave. Sioux Falls, SD (605)

Directors of Equalization Haakon County 140 S. Howard Philip, SD (605) Jackson County 1 Main St. S. Kadoka, SD (605)

May Help Qualify for Ag Status (Pennington, Fall River, Custer) Tree Farm System 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, South Dakota Department of Agriculture P.O. Box 940 Huron, SD