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Show September 1971 "Greenbelt"- - Reappraisal Laws Affect Farm Taxes comprised of representatives of the Landowners Association,' the County Assessors Organization, the County Commissioners, the State Department of Agriculture, the State Tax Commission, and Utah State University. The work of the Farmland Evaluation Committee was accomplished by preparing budgets for each of the major crops produced on each class of land. In the case of grazing land, of course, the budget was restricted to the income produced by grazing the various range lands. To begin the work, budgets for various crops by Dr. Lynn H. Davis Professor, Economics Dept. Utah State University Two laws, passed in recent years by the Utah legislature, will soon influence 'the taxes on agricultural land in Utah. Hie first law requires reappraisal of all private property in Utah every 5 years. The second law, the Farm Land Assessment Act of 1969, allows qualified agricultural land to be taxed on the basis of its agricultural use value rather than market value. It is commonly referred to as the Greenbelt Amendment. Both of these laws will take effect in 1972. Taxation of agricultural land in Utah has had a history similar to taxation of other property in the state. Customarily, assessed values were established for each county at some specific point in time and the values remained at that established level for a number of years before a review was made to update the assessed value. Coordination of these assessment reviews among the counties was not required although the State Tax Commission did make some attempt to equate the assessed values in the various counties. Agricultural land has, of course, carried an important share of the tax burden. Utah law provides that property assessments should not exceed 30 percent of market value. It is known, however, that the percentage of assessment is below 30 percent throughout the state and varies from county to county. In recent years, action has been taken to have all property taxed on the basis of at least 20 percent of market value. In some cases land has been taxed at 6 percent; in other cases, 13 or 15 percent. One purpose of the laws is to equate the assessment percentage throughout the state. In the taxation of other kinds of property, such as utilities or commercial property, the assessment level has not been the same as it has been on farm land. Reappraise every 5 years . . . Under the new law, the State Tax Commission will reappraise all private property in the state during the next 5 years. Thus, several counties each year will be involved. One thing already realized is that market values are much higher because of inflation and the increased demand for land. the assessed value also Therefore, will be much higher. This is particularly true in counties that have had increased population or industrial growth with subsequent pressure for subdivision or commercial development. In these counties the new assessment levels may be 200 percent or more than present levels. This situation caused a number of Utahns to worry about the status of agricultural land in urban areas and the level of taxation that farmers will be able to bear and still remain in farming. The resultant passage of the Farmland Assessment Act of 1969 thus allows farmers to have their land taxed on the basis of its income earning capacity rather than market value. Land Assessment Act Requirements To qualify for agricultural-us- e taxation, a parcel of land must (1) comprise' at least 5 contiguous acres exclusive of the homesite and all other acreage; (2) have been used for agricultural production for 5 years preceding application; (3) earned a gross annual income of $500; and the owner of such land must make an application to have his property valued, assessed, and taxed under the law. Application must be made to the county assessors office in the county where the land is non-agricultu- ral were obtained from previous studies conducted at Utah State Dr. Lynn H. Davis Department of Page UTAH FARM BUREAU Economics USU. located. The law specifies apgricultural use as any use that is normally thought of as being related to agriculture, including fur animals, trees, fruits, and vegetables. To initiate the new law, all of the agricultural land in private ownership had to be classified for its agricultural use value. To ac- complish this, the State Tax Commission employed a number of land classification experts who visited each county and the various sites within the counties. They classified the land as follows: Irrigated Land - Four classes numbered I through IV. Crop Land - Two Classes, III and IV. Range Land or Grazing Land Four Classes, numbered I, II, III, Beginning early in August 1971 there will be on file, in every county assessors office, three tools for implementing the Farmland Assessment Act. 1. A complete set of county plats reflecting the soil classes and the number of acres in each class in each ownership parcel. 2. A schedule of the assessment values based on agricultural use values that will apply to each class of land if the land is to be taxed under the Farmland Assessment Act. 3. Application forms for inclusion under the program. Individual land owners should ascertain the eligibility of their property and the probable tax savings, if any, that may accrue to them by filing for taxation under the Farmland Assessment Act. Applications should be filed prior to October 1 for participation under the Act for the 1972 tax year. Signed applications will be accepted after October 1 and up to November 30, but such late applications carry a filing penalty of University. These budgets were adjusted for county differences in factors such as yield, price, and certain input costs. The resulting county budget for each crop was then discussed in a meeting held with selected county agricultural leaders and officials to verify or to find wherein the budgets needed adjusting to represent the actual situation that existed in each county. These budgets were then $25.00. used to calculate the net income to Annual Signup the land on the basis of a typical There will be an annual signup rotation for the class and type of land. This net income was then period so landowners will need to capitalized to give an estimate of keep informed about the taxation values of their agricultural lands. the agricultural use value. 3 has In counties where reappraisal not been completed yet it may be financially advantageous to let the taxation be based on the old methods still in use. However, when the reappraisal is made, it probably will be advantageous to file an application at that time. The Farmland Assessment Act of 1969 does not provide for a permanent reduction in the amount of taxes paid on agricultural land. There is a rollback tax provision that becomes effective if land taxed under the law is changed to a use. Tax benefits obtained under the Act beyond the k period no longer constitute a lien upon the property. For example, if a farmer has had his land under the Greenbelt provision for a period of 7 years and then changes the use of the land he is only liable to redeem the tax benefits for the previous 5 years. To compute the amount of k tax payable when a in use occurs, the difchange ference between what you have paid under the Greenbelt values and what you would have had to pay under the market value k assessment equals the tax due. Forms for computing the non-agricultu- ar ral roll-bac- roll-bac- roll-bac- tax will be on file with assessors. county roll-bac- k Non-Irrigat- ed -- IV. This was a tremendous task because there are approximately acres of private 13,200,000 in the state. land agricultural Factors such as climate, slope, soil type, water availability, and drainage were considered in making this classification. After the land was classified in the field, lines were drawn on aerial photographs to show where the land changed from one class to another. The aerial photographs were then brought in to Salt Lake City, where, through the use of a projector, the land classification was transferred to ownership plats which are available in county offices. Measurements were then made of the acreagv for a given parcel of land that fell into each of the classes. This classification becomes very important because the earning capacity of eac land class is different. Uniform Land Classification Each county in the state has historically had what they have referred to as number 1 irrigated land, number 1 dry land, and number 1 grazing land. placed in each category was usually the best land available in the county in that particular use. Under the new classification, which is designed quite closely to the Soil Conservation Service Land Use Classification, in our state no counties many longer have what is known as number 1 land. What used to be called number 1 land may now be number 3. This causes some confusion and caution should be exercised when referring to the new classification in comparison with the other classification. The new classification has the definite advantage that given class parcel of land in any county in the state the same under the old whereas productivity not was this necessarily so. system Act Assessment The Farmland established a committee known as the Farmland Evaluation Committee. Its function was to make recommendations to the Utah State Tax Commission as to the agricultural use values of the various classes of agricultural land in the state. This committee was . WIDER TREAD LONGER MILEAGE Such classification meant that land has 78 Series Design, Modern Styling IMPROVED TRACTION Get your with you i certificate Intermou Farmer ! essentially Certificates available through County Farm Bureaus |
