Rushmore Shadows, LLC v. Pennington County Board of Equalization
2013 S.D. 73
| S.D. | 2013Background
- Rushmore Shadows owns fourteen recreational park trailers used as cabins in a Rapid City campground and was taxed as real property.
- The county relied on SDCL 10-4-2(2) to classify the cabins as improvements to land subject to ad valorem taxation.
- Trailers are on wheels, under 400 square feet, and were converted from vehicles to stationary lodging with utilities connected.
- Some trailers were never moved since placement; several are not registered as vehicles, yet they function as campground lodging.
- The circuit court granted Rushmore Shadows summary judgment; the County challenged, arguing the cabins are realty improvements.
- The supreme court undertook de novo review of the statutory interpretation and application of the tax statute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the cabins improvements to land under SDCL 10-4-2(2)? | Rushmore Shadows: cabins are not improvements; they are mobile or non-permanent structures. | County: cabins are permanent improvements that enhance land use and are subject to real property tax. | Yes; cabins are improvements to land. |
| Can intent be inferred from circumstances to classify as improvements despite lack of physical attachment? | Rushmore Shadows: lack of physical attachment negates permanent affixation and intent. | County: constructively attached and used to promote land use; intent can be inferred from circumstances. | Circumstances support intent to permanently affix for economic life. |
| Does the recreational park trailer status exclude taxation under any SDCL 10-4-2 provision? | Rushmore Shadows: if a cabin is a recreational park trailer, it is categorically exempt from taxation under subsection (5). | County: exemption does not apply if the item becomes an improvement to land under subsection (2). | No categorical exemption; can be taxed as real property if it constitutes an improvement to land. |
Key Cases Cited
- In re Tax Appeal of Logan & Assocs., 331 N.W.2d 281 (S.D. 1983) (defining 'improvement' and considering fixtures and attachment)
- Dakota Harvestore Sys., Inc. v. S.D. Dep’t of Revenue, 331 N.W.2d 828 (S.D. 1983) (intent and circumstances in determining attachment and use)
- Brink Electric Constr. Co. v. Dep’t of Revenue, 472 N.W.2d 493 (S.D. 1991) (property used to promote land use; affirms realty improvements concept)
- Nat’l Food Corp. v. Aurora Cnty. Bd. of Comm’rs, 537 N.W.2d 564 (S.D. 1995) (illustrates fixture/attachment considerations in tax context)
- First Nat’l Bank of Aberdeen v. Jacobs, 273 N.W.2d 742 (S.D. 1978) (principles on deducing intent from circumstances)