Deadwood Stage Run, LLC v. South Dakota Department of Revenue
857 N.W.2d 606
S.D.2014Background
- In February–March 2006 property in Lawrence County was sold for $1,000,000; county assessed value as of Nov. 1, 2005 was $22,630. Purchasers later transferred the property to Deadwood Stage Run, LLC (Developer).
- County re-assessed the property per SDCL 10-6-2 using Nov. 1, 2006 values; because sale price exceeded 150% of prior assessed value, county revalued land to $924,960 and improvements remained $9,560 (aggregate $934,520).
- City of Deadwood created Tax Incremental District No. 8 on Dec. 18, 2006; Developer and City executed development contract and later amended project plan.
- The City requested the Department of Revenue certify the district’s tax incremental base in Oct. 2007; the Department certified aggregate assessed value based on the county’s 2007 assessment (land $924,960; improvements $9,560).
- Developer sued for declaratory relief, arguing the Department should have used the last Department-issued certificate dated Aug. 25, 2006 (reflecting the county’s Nov. 1, 2005 assessed valuation) to determine the tax incremental base. Circuit court granted summary judgment to Department; Developer appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SDCL ch. 11-9 requires the Department to use the last valuation it certified prior to district creation when determining the tax incremental base | Developer: statute requires using valuations last certified by the Department prior to district creation (so county’s 2006 certificate governing Nov. 1, 2005 values should control) | Department: statutory phrase is unworkable if applied to land; Department can use county’s assessed valuation reflecting Nov. 1, 2006 values certified in 2007 | Court: SDCL 11-9-20’s “last previously certified” phrase applies to improvements (buildings) not land; Department correctly used the county’s valuation reflecting Nov. 1, 2006 (certified in 2007) and its certification was proper; judgment for Department affirmed |
Key Cases Cited
- Meierhenry v. City of Huron, 354 N.W.2d 171 (S.D. 1984) (explains purpose of tax incremental financing)
- Argus Leader v. Hagen, 739 N.W.2d 475 (S.D. 2007) (statutory interpretation reviewed by plain meaning)
- Dykstra v. Page Holding Co., 766 N.W.2d 491 (S.D. 2009) (summary judgment standard)
- Cowan Bros., LLC v. Am. State Bank, 743 N.W.2d 411 (S.D. 2007) (summary judgment principles)
- Econ. Aero Club, Inc. v. Avemco Ins. Co., 540 N.W.2d 644 (S.D. 1995) (review limited to legal questions when facts stipulated)
- Double Diamond Constr. v. Farmers Coop. Elevator Ass'n of Beresford, 656 N.W.2d 744 (S.D. 2003) (avoidance of rendering statutory provisions surplusage)