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The South Dakota Legislative Research Council recently posted the minutes (PDF alert!) of the first meeting of the Ag Land Assessment Task Force—you know, the folks charged with overseeing the replacement of property tax with income tax for farmers. This is no small step: Michael Kenyon, director of DRR's Property and Special Taxes Division, said at the July 28 hearing that the new income tax (ah, remember, the state prefers the term "productivity tax") is an "enormous change in the assessment system and it will take many steps to make this transition as smooth as possible" [minutes, p. 3].
Task force member and former state ag secretary Larry Gabriel noted [p. 5] that the coming productivity assessment formula is based on soil survey data on land "suitable as cropland," not data on whether the land is actually cropped. Kenyon says that the formula will determine "top dollar value for cropland and noncropland land based on soil surveys and other factors to determine its highest and best use. It will be a major change to assess agricultural land based on actual use" [p. 5]. Senator David Knudson added that "actual use" was amended out of the original legislation [p. 5].
Here we see why the new income tax isn't quite an income tax: instead of taxing farmers on what they make, it sounds like the state plans to tax farmers based on what the state wishes they could make. Let your land lie fallow a season or get hailed out, and you might still be assessed based on a countywide or statewide average productivity for all crops over the past several years.
If income tax worked this way, the IRS would look at me and say, "Sure, you chose to be a teacher and take home $30K/year, but folks with similar education and skills earn an average of $60K a year, so we're basing your taxes on that figure." Yikes!
You think the state's new vehicle licensing system has made a splash in the news? Just wait until farmers get their new productivity assessments in 2010 on taxes payable in 2011. If the tax works the way the above comments suggest, the lines at the courthouse won't be folks at the treasurer's office holding their registration; it'll be farmers at the assessor's office waving pitchforks.
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Likewise, if the land is under water for years it could be taxed at a very high rate. The implementation of this is looking dumber every day. As with everything, the devil is in the details, its execution and the management of that execution. It would appear that this well-intentioned idea is off to a lousy, perhaps irrecoverable start.
ReplyDeleteYou hit the nail on the head - the tax will be based on what Pierre wants the land to produce. Hello Big Brother.
I knew this was dumb and unfair when it was first proposed - how did the legislature ever get it in their heads that this was a sensible and better approach to taxing land? What recourse do people have to stop this in its tracks?
ReplyDeleteWell, I bet we will hire an army of "farm land qualifying agents" to administrate this change. Which in turn will require more "productivity" taxes. Which will in turn increase that tax burden for farmers above any potential savings from the new land classification system.
ReplyDeleteTop soil washes away. The amount of fertilizer used changes dirt quality. Each farmer should rightfully be able to claim that every inch of their land needs to be resurveyed every year.
If a "productivity tax" were applied to my work (writing) in the same way as it will supposedly apply to farming, I'd change my name to John Frum and sail away to Vanuatu.
ReplyDeleteHow about all those affected by this new "income tax" show up en masse at the next meeting of the Ag Land Assessment Task Force and "filibuster" those with how stupid this idea is, and yes like Tony said, demand yearly assessments because the soil does differ every year.
ReplyDeleteHow about checking to see how your congress people voted on this and let them have it at the upcoming state fair, dakotafest, etc and by phone calls and emails. Overwhelm them!
Actually, here it is, those who voted for this and against it.
ReplyDeleteFollowing are the final votes for this bill in both the Senate and the House. If your senator or representative is NOT listed below, it means they voted for it. Question them. Make them explain their votes!
SENATE:
Voted against: Apa, Gant, Jerstad, Napoli , Koetzle
Excused: Turbak-Berry, McNenny
All the rest voted for it.
HOUSE:
Voted against: Faehn, Koistinin, Lust, Dave Nostrup, Moore, Steele, Cutler, Feinstein, Hackl, Havery, Al Novstrup, Russell Olson, Bradford, Engels, Glenski, Heineman, Miles, Thompson, Van Etten, Peters, Willadsen, Wick, Van Norman, Weems
Excused: Gassman, Davis
All the rest voted for it.
--Again, If your senator or representative name is NOT listed above, they voted for this bill.
Anon 6:42: Next meeting of the Ag Land Assessment Task Force is Monday, September 8 in Pierre. I assume it will be held at the same place as the first meeting: Legislative Conference Rooms 1 & 2 in the State Capitol, starting at 10 a.m. You can probably call the Legislative Research Council at 605-773-3251 to confirm.
ReplyDelete