This bill introduces a new classification of nonagricultural property for taxation purposes in South Dakota, defining it as property classified under specific subdivisions of existing law. It amends the current property classification system to include two new categories: "Commercial-operator nonagricultural property" and "Commercial-investor nonagricultural property." The bill outlines the criteria for classifying properties, including definitions for terms such as "ownership holder," "family business," and "material participation." It also establishes a process for ownership holders to apply for reclassification and renew their status annually, along with penalties for misrepresentation in applications.

Additionally, the bill modifies the tax levy structure for school districts, specifying that the maximum levy for commercial-operator nonagricultural property must be at least 25% lower than that for nonagricultural property starting in 2028. It includes provisions for penalties for misrepresentation, with fines assessed for both knowing and negligent misrepresentation of facts in applications for property classification. The bill aims to create a more structured approach to property taxation while ensuring compliance and accountability among property owners.

Statutes affected:
Introduced, 01/29/2026: 10-6-110, 10-12-42