The
Utah Farmland Assessment Act
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.
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 Utah State University. Productive
values apply county-wide. These are based upon income and
expense factors associated with agriculture activities.
These factors are expressed in terms of value per acre for
each land classification.
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 SCS 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
re-classification.
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 legal ownership. Land used in connection
with the farmhouse, such as landscaping, etc. cannot be
included in the acreage for FAA eligibility. Land must be
actively devoted to agricultural use, and the operation
managed in such a way that there is a reasonable expectation
of profit. Land must have been devoted to agricultural use
for at least two successive years immediately preceding
the tax year in which application is made and meet the average
annual (per acre) production requirements.
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 county assessor
will use the following sources: 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 he 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.
Exceptions
The
acreage requirement may be waived if the owner can show
that 80 percent or more of the owner's, purchaser's, or
lessee's income is derived from agricultural products produced
on the land. The production requirement may be waived if
the owner shows that the property has been in agricultural
use for the previous two years and that failure to meet
the production requirement in a particular year was due
to no fault or act of the owner, purchaser, or lessee. The
production requirement may 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.
Application
Deadlines
New
applications for assessment and taxation under the Utah
Farmland Assessment Act must be filed by May 1. Applications
necessary because of ownership change, legal description
change, assessor request or similar reasons must be filed
within 120 days of a change.
How
do I apply?
An
application for assessment and taxation of agricultural
land under the FAA can be obtained from your county assessor.
This application should be completed and returned to the
county assessor before May 1, of the year in which the preferential
assessment is desired. Supporting documentation may be required
such as federal tax returns, affidavits, lease agreements,
sales receipts, production records, etc. which show the
production requirement has been met for the preceding two
years.
Who
may apply?
Any
owner of agricultural land may apply for assessment and
taxation under the Farmland Assessment Act.
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.
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
subject to what is known as a rollback tax. The rollback
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 and market value
for each of the years in question will be applied to determine
the tax amount.
For
further Information, refer to Standard 7 on the Farmland
Assessment Act by clicking anywhere on this line. |
