There will be no new property tax classification for South Dakota.
Members of the Senate State Affairs committee voted 7-2 to kill House Bill 1086, which created a new tax levy for a school district’s general fund for leased property. The premise of the bill had a similar fate in a Senate committee last year after passing through the House.
ASBSD was monitoring the bill.
Proponents argued the bill provided protection against the rise of rental rates for renters due to property tax increases on the rental unit owners and separated the housing units from the businesses, such as Wal-Mart, they’ve been classified with.
“Unless you can separate the housing aspect…you’ll continue to say we’re a business,” Dean Krogman of the S.D. multi-housing association said. “I think you understand the argument, but I think you’re afraid of what’s going to happen.”
The proposed reclassification would take effect in fiscal year 2016 and the levy would be set at $9.20 per thousand dollars, the same levy amount for commercial property set for FY14.
Opponents of the bill said the rental units are businesses and there was no guarantee the savings in property taxes for the units would be passed on to renters.
“We don’t have reassurance with this legislation…that the savings would be passed on (to renters),” Sen. Jason Frerichs said.
Sen. Corey Brown suggested proponents come back with the data to support their claims and more in-depth discussion could be had at that time.