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reduce the maximum property tax levies for the general fund of school districts.

This bill reduces the maximum property tax rates that school districts can charge on three categories of property starting in 2023. The general tax levy cap drops from $6.52 to $6.37 per $1,000 of property value, the agricultural property cap falls from $1.49 to $1.37 per $1,000, and the owner-occupied home cap decreases from $3.15 to $3.08 per $1,000. These lower limits mean school districts will collect less property tax revenue unless they receive approval to exceed the new maximums.

provide property tax relief for family day care homes.

Family day care home owners who are registered with the state can reduce their property's assessed value by 2% for each child they care for (up to a 20% maximum reduction), which lowers the property taxes they owe. The reduction only applies if they care for at least four children and they can claim it a maximum of three times. Owners must apply annually by April 1st with proof of their registration and the number of children in their care.

limit the increase of assessed value of property for the purpose of taxation, and to limit the property tax due on property.

This bill caps how much property taxes homeowners and businesses pay each year at no more than 1% of the property's assessed value, and limits annual increases in assessed values to 3% or less (unless the property has been significantly improved or changed). It also tightens rules requiring that assessed values stay closer to actual market values, with a maximum assessment level of 85% of market value instead of the current range. These changes make property tax bills more predictable and limit how much assessments can jump year to year.

revise property tax levies for school districts and to revise the state aid to general and special education formulas.

This bill reduces the maximum property tax levy that school districts can charge for their general fund, effective for taxes payable in 2023 and beyond. The overall school levy drops from $6.52 to $5.60 per $1,000 of property value, while agricultural property levies fall from $1.40 to $1.35 per $1,000, and owner-occupied home levies decrease from $3.15 to $2.30 per $1,000. These lower tax caps are accompanied by revisions to how the state calculates its aid to schools to help offset the reduced local tax revenue.

provide for the assessment of certain agricultural land as noncropland.

SB 206 changes how certain agricultural land is taxed by allowing some farmland to be assessed as "noncropland" rather than cropland, which typically results in lower property tax valuations. The bill modifies the assessment rules in state law to expand when landowners can qualify for this noncropland classification on their tax assessments.

to eliminate property tax for certain seniors.

This bill creates a new property tax exemption for seniors who meet specific qualifications: they must be at least 65 years old (implied by "seniors"), have owned property in South Dakota for at least 20 years, have a household income of $60,000 or less, own a home worth $500,000 or less, and have no unpaid property taxes. The exemption eliminates all property taxes on their owner-occupied, single-family home, and the income and home value limits automatically adjust annually for inflation.

allow persons moving from certain municipal zones to retain property assessments from original homes.

South Dakota municipalities can now establish special zones where homeowners who have lived in their house for at least five years can transfer their property's assessed value to a newly built home they move to outside that zone. This allows homeowners to avoid higher property tax assessments when building new homes, as long as they sell their original home to a non-family member and move outside the designated municipal zone. The transfer is optional for municipalities to allow through a local resolution.

revise the discretionary formula for reduced taxation of new structures and residential property.

Counties in South Dakota currently have the option to reduce property taxes on new structures for up to five years after construction, and this bill clarifies and slightly adjusts how that discretionary tax reduction works. The bill specifies that counties must apply their chosen tax reduction formula equally to all similar properties within the same taxing district, and it allows property owners to request that the tax reduction not apply to their new structure if they prefer to pay full taxes immediately. The bill also makes technical corrections to the law's language about how assessed values are calculated during the tax reduction period.

require taxing districts to hold a public hearing when increasing property tax revenues relative to the previous year.

Property tax districts in South Dakota would be required to hold a public hearing whenever they propose to increase the total property tax revenue they collect compared to the previous year. This gives taxpayers a chance to publicly comment on and challenge tax increases before districts can raise their levies.

provide for the assessment of certain agricultural land as noncropland.

This bill allows agricultural landowners to have high-elevation land (above 1,950 feet) assessed as lower-value "noncropland" if it's been in perennial vegetation for at least 20 years and used for grazing, or if it's native grassland—regardless of soil type. Landowners must request this classification by August 1st with documentation, and must notify the state if they later change the land's use to cropland or another purpose.

make an appropriation to fund tax refunds for elderly persons and persons with a disability and to declare an emergency.

The state will provide $450,000 to reimburse elderly and disabled residents for real property taxes and sales taxes they've already paid, with up to $20,000 going toward administrative costs. The bill also removes a rule that previously prevented people from getting these tax refunds if they were already receiving other property tax relief, allowing eligible seniors and disabled individuals to potentially receive both benefits.

provide for the use and regulated sale of marijuana, and to impose a tax on the sale of marijuana, and to distribute that revenue to counties.

South Dakota would impose a 15% tax on all marijuana and marijuana product sales, replacing the existing marijuana tax rate. After the state deducts its administrative costs, any revenue exceeding $10 million annually would be split between counties (based on where sales occurred) and the state general fund, with counties required to use their share for courthouse, jail, and road projects or to reduce property taxes. Revenue under $10 million would go entirely to the state general fund.

add solar energy tax revenue to the calculation of local effort for state aid to school districts.

HB 1081 changes how the state calculates school districts' local tax effort when determining how much state education funding they receive. The bill adds revenue from solar energy taxes to the calculation of local effort, meaning districts with solar installations will be considered to have more local resources and may receive less state aid as a result. This shift affects how state aid dollars are distributed among school districts based on their local tax base.