The Utah Farmland
Assessment Act (FAA, also called the Greenbelt Act) allows
qualifying agricultural property to be assessed and taxed based
upon its productive capability instead of the prevailing market
value. This unique method of assessment is vital to agriculture
operations in close proximity to expanding urban areas, where
taxing agricultural property at market value could make farming
operations economically prohibitive.
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How is productive value determined?
Productive values are
established by the Utah State Tax Commission with the assistance
of a five-member Farmland Assessment Advisory Committee and the
Utah State University.
Productive values are apply statewide and are based upon income
and expense factors associated with agricultural activities. These factors are expressed in terms of value per
acre for various land classifications.
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How is land classified?
Land is classified
according to its capability of producing crops or forage.
Capability is dependent upon soil type, topography, availability
of irrigation water, growing season and other factors. The County
Assessor classifies all agricultural land in the county based
on Natural Resource Conservation Service Soil Surveys and guidelines
provided by the Tax Commission. The general
classifications of agricultural land are irrigated, dryland,
grazing land, orchard and meadow. If you disagree with your land
classification, you can appeal to your county board of equalization for
reclassification.
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What does it take to
qualify?
Private farmland can qualify for assessment
and taxation under the Farmland Assessment Act if the land:
-
is at least
five contiguous acres in area. Land less than five acres may qualify where
devoted to agricultural use in conjunction with other
eligible acreage under identical ownership. Land used in
connection with the farmhouse, such as landscaping, etc. cannot be
included in the acreage for FAA eligibility.
-
is actively
devoted to agricultural use, and the operation is managed
in such a way that there is a reasonable expectation of
profit;
-
has been devoted
to agricultural use for at least two successive years
immediately preceding the tax year in which application
is made; and
-
meets average
annual (per acre) production requirements.
-
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Production
Requirement Defined:
To qualify for the
Farmland Assessment Act land must produce in excess of 50 percent
of the average agricultural production per acre for the given
type of land and the given county or area. To determine
production levels the following
sources are used: the most recent publication of Utah Agricultural
Statistics; crop and enterprise budgets published by Utah State
University; or standards established by the Tax Commission.
Examples:
(1) A farmer grows alfalfa. The average annual production of alfalfa
in his area is four tons per acre per year. To qualify the land must produce
more than two tons per acre per year.
(2) A rancher has 10 acres of irrigated pasture which would reasonably carry 10
cows or 50 sheep through the grazing season. To qualify, he will need to
graze more than five head of cattle or 25 sheep.
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Exceptions:
The production requirement
may be waived if the owner can show that 80 percent of more of the owner's,
purchaser's, or lessees' income is derived from agricultural products produced
on the land or failure to meet the 5 acre requirement arose solely out of an
eminent domain proceeding.
The production requirement
will be waived if the land is involved in a bona-fide range
improvement program, crop rotation program, or other similarly
accepted agricultural practice which does not give reasonable
opportunity to satisfy the production level requirement.
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Application deadlines
New applications for assessment and taxation
under the Utah Farmland Assessment Act must be submitted by May 1 of the tax
year in which assessment is requested. Applications must be filed within
120 days because of ownership change, legal description change, assessor
request, etc..
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How do I apply?
An application for assessment and taxation of
agricultural land under the FAA can be obtained from your County Assessor.
Supporting documentation may be required such as; affidavits, lease agreements,
sales receipts, production records, etc. which show the production requirement
has been met for the preceding two years.
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Who may apply?
Any owner of agricultural land may apply for
assessment and taxation under the Farmland Assessment Act.
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Can
leased land qualify?
Leased land can qualify for assessment and
taxation under the FAA if the acreage requirement is met and the production
requirement is satisfied. A purchaser or lessee may qualify the land by
submitting, along with the application from the owner, documents certifying that
the production levels have been satisfied.
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What happens when land is
withdrawn
from FAA?
When land becomes
ineligible for farmland assessment (such as when it is developed
or goes into non-use), the owner becomes to subject to what is
known as a "roll-back tax." The roll-back tax is the
difference between the taxes paid while on greenbelt and the taxes which would
have been paid had the property been assessed at market value. In
determining the amount of rollback tax due, a maximum of five years preceding
the change in use will be used. The tax rate for each of the
years in question will be applied to determine the tax amount. Because
land removed from Greenbelt is subject to the rollback tax, it is important to
review the "market value" annually and to appeal the value if you consider it
incorrect. Current law does not allow you to appeal the market value for past
years.
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Valuation Changes
The Utah State Tax Commission, based on a
four-year study conducted by Utah State University, has adjusted the values used
for farmland assessment. The basic changes in addition tot he valuation
changes include:
-
A system has been developed to annually
update values for land assessment under the Farmland Assessment Act.
-
Under the old system land with equal
productive capabilities was similarly valued by region. Under the new
system land values will be individualized for each county based upon
agricultural production, income, and expenses for that county.
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Land Classification Schedule
Duchesne County Taxable Value
Per Acre By Classification
| Type of Land |
2004 Year |
2005 Values |
| I |
IRR |
$0 |
$0 |
| II |
IRR |
$495 |
$490 |
| III |
IRR |
$345 |
$340 |
| IV |
IRR |
$245 |
$240 |
| |
|
|
|
| I |
ORCH |
$600 |
$610 |
| II |
ORCH |
$600 |
$610 |
| III |
ORCH |
$600 |
$610 |
| IV |
ORCH |
$600 |
$610 |
| |
|
|
|
| IV |
MEADW |
$160 |
$160 |
| |
|
|
|
| III |
DRY |
$40 |
$40 |
| IV |
DRY |
$5 |
$5 |
| |
|
|
|
| I |
GRAZE |
$64 |
$68 |
| II |
GRAZE |
$18 |
$20 |
| III |
GRAZE |
$12 |
$13 |
| IV |
GRAZE |
$5 |
$5 |
| |
|
|
|
| |
NON-PROD |
$5 |
$5 |
Note: Zeros indicate that no
agricultural land of that classification exists in the county.
The table above represents agricultural
use-value per acre in Duchesne County for the various classes of
agricultural property.
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