HB1182 Raising Teacher Salaries – how much would taxes change for your Agricultural Operation?

Added February 12th, 2016 by

Raising sales tax by 1/2 cent will raise about $107 million dollars.  And decreasing property tax will cost about $40 million dollars.  But how much will your agricultural operation pay to support the change?  You can figure that out by answering two questions.

Question 1:   What is my agricultural land evaluation? (this tax will decrease $10/$100,000 evaluation per year)

Question 2:    How much do I spend on equipment subject to sales tax? (this tax will increase 0.5% a year) chart ag tax changes

Examples for owner occupied residences:

Formula:                                                         farm/ranch A     farm/ranch B     farm/ranch C

+  Property tax decrease                                      $100                     $200                     $400

–    Sales tax increase                                       – $250                  – $500                – $1000

Farm/Ranch net tax increase/decrease               $150                     $300                     $600

Farm/ranch A:  This farm/ranch has agricultural valuation of $500,000 and equipment purchases of $50,000 per year. Their sales tax increase on ag equipment is $250 and their ag property tax decrease is $100. Their net annual tax increase will be $150.

Farm/ranch B: This farm/ranch has agricultural evaluation of $1,000,000 and equipment purchases of $100,000 per year. Their sales tax increase is $500 and their property tax decrease is 200. Their net annual tax increase will be $300.

Farm/ranch C:  This farm/ranch has agricultural evaluation of $2,000,000 and equipment purchases of $200,000 per year. Their sales tax increase is $1,000 and their property tax decrease is $400. Their net annual tax increase will be $600.

Analysis and charts by SD Budget & Policy Institute.  Data Sources:

Governor Daugaard’s 12% Tax cut Teacher Pay Proposal presented to Joint Committee on Appropriations, posted 2-5-15

Be Sociable, Share!

Leave a Reply