PIERRE, S.D. (KELO) — The private corporation that manages a housing development for personnel at Ellsworth Air Force Base owed property taxes to Meade County starting in 2011, even though the U.S. government wasn’t taxed on the 838 units during the previous 20 years before the company took control of the lease, the South Dakota Supreme Court said in a decision released Thursday.
Hunt Companies paid taxes for 2011, 2012 and 2013 but successfully appealed the assessed valuations and received substantial reductions. The county valued the housing at $35.7 million for each year. Circuit Judge Gordon Swanson decided the values should have been calculated on the leasehold interest instead and set those amounts at $14.1 million, $15.5 million and $15.1 million.
Lawyers for the company later wanted the taxes refunded entirely. They argued that the property where Antelope Ridge is located is exempt from tax and solely owed by the United States, and their client’s leasehold wasn’t taxable, was wholly tax-exempt and never had any taxable interest there.
The county refused the refund. The circuit judge ruled for the county.
The Supreme Court’s 3-1 decision Thursday affirming the circuit judge’s action was somewhat unusual. The high court rulings often have been unanimous.
Justice Janine Kern wrote the majority decision. She was joined by Chief Justice David Gilbertson and Justice Mark Salter. She said the company’s constitutionality argument wasn’t properly before the Supreme Court or the circuit court and neither side appealed the circuit judge’s decision to re-set the assessed valuations.
Justice Kern noted the company acknowledged it had failed to use the pay-and-protest provision of a state law 10-27-2 that allows 30 days to file an action seeking recovery. She also said the company didn’t invoke a South Dakota Constitution provision that exempts the U.S. government from being taxed.
“Indeed, the parties and the valuation court proceeded on the implicit premise that Hunt’s leasehold interest was taxable,” Kern wrote.
The company instead cited a different state law 10-18-1 that allows up to four years to seek an abatement or refund. Justice Kern said that would have required the Supreme Court to “stretch the language” to make the case fit.
“We are mindful of the enormity of the county’s overvaluation of Hunt’s leasehold interest. Yet we also cannot interpret SDCL chapter 10-18 simply to avoid this result,” Kern wrote.
Justice Steven Jensen filed a dissent. Jensen wrote that the circuit court had previously determined the assessments at issue were invalid under the state constitution’s exemption for public property and the company was entitled under state law 10-18-1 to request a tax refund.