Q&A: Agricultural assessments

Q. If my farm consists of multiple parcels, do I have to submit a separate application for each parcel?

A. Yes. You are required to submit a separate application for each parcel the first time you apply. In succeeding years, if the operation is entirely within one municipality and there are no changes in ownership, total acreage, classification of soils, usage, or total acreage, you can submit one Form RP-305-r, Agricultural Assessment Renewal Certification, for the entire operation. For details, see the renewal form.

Q. My farm consists of multiple parcels, so I’m required to submit an initial application for each parcel. How will the assessor know that each application is for the same farm operation?

A. On page 2 of Form RP-305, list the tax map number, location, and number of acres of each parcel used in conjunction with the parcel for which you’re requesting the exemption. That will indicate to your assessor that there are multiple applications for one farm.

Q. If my farm consists of multiple parcels that total seven acres, and some of the parcels are in Town A and others are in Town B, can I still be eligible for an agricultural assessment for the entire farm operation?

A. Yes, if the land is used as a single operation and meets all other eligibility requirements. When you list the parcels on page 2 of the application, also note which town each parcel is in. Bear in mind that you will have to submit Form RP-305 for each parcel in subsequent years, as well. You cannot use the renewal form if your operation is in multiple municipalities.

Q. To meet the acreage requirements, must each parcel within a farm operation meet the seven-acre requirement, or can the applicant combine all the parcels in the operation?

A. The seven-acre minimum applies to land used as a single operation grossing $10,000 or more a year. It can include any number of parcels owned or leased to meet that seven-acre requirement.

The instructions (page 10) for Form RP-305, Agricultural Assessment Application note the following:

Land contained within separately assessed parcels owned by the applicant and used for agricultural production in conjunction with the subject parcel is considered part of the applicant’s farm unit for purposes of satisfying any minimum acreage or gross sales requirements.

Q. Is woodland eligible for an agricultural assessment if it is used to forage mushrooms for sale?

A. According to Agriculture and Markets Law, Section 301 (2)(k), crops, livestock and livestock products include actively managed log-grown woodland mushrooms. For actively managed log grown mushrooms to qualify without the addition of other crops or products, the farm would need to include logs covering seven acres of land and generate average gross sales of $10,000 or more.

Q. Would the land under a tiestall or stanchion barn be considered cropland for an agricultural assessment? ­

A. The determination of eligibility is made by the assessor. In general, land can be eligible if crops, livestock, or livestock products are produced on it. Lands used for processing or retail sales are generally not eligible.

Q. Can an assessor ask for any documentation to prove eligibility?

A. In our Legal Property Tax Questions – Asked and Answered, we state the following:

The law does not require any particular documentation to be submitted with an application for agricultural assessment. Since the burden of establishing eligibility for the exemption rests with the applicant, the applicant may choose what information to supply to the assessor. Such substantiation may include Schedule F, bookkeeping records, bills of sale, receipts, other financial records, or any combination of the above. The failure to submit a Schedule F is not, in and of itself, grounds to deny the application. If the information provided substantiates that the land satisfies the gross sales value requirement, and all other qualifications are met, then the agricultural assessment should be granted.

On the other hand, the assessor must be satisfied that the eligibility requirements are satisfied before he or she may grant the exemption. If the assessor finds the documentation submitted with the application to be inconclusive, he or she may make reasonable demands for additional information, including the Schedule F. Ultimately, if after reviewing the information provided, the assessor reasonably finds that the applicant has failed to demonstrate that the land meets the average gross sales value requirement, he or she would be obliged to deny the application.

Q. I provided the assessor with proof that my milk gross sales exceeded $10,000, but the assessor is still requiring me to provide Schedule F. Can they do that?

A. The burden of proof is on you, as the applicant. As noted above, If the assessor finds the documentation submitted with the application to be inconclusive, he or she may make reasonable demands for additional information, including the Schedule F.

Q. If I don’t believe the documentation requested by the assessor is warranted, can I challenge the request?

A. If your assessor denies the application, regardless of the reason for the denial, the property owner can challenge the determination to the board of assessment review. Learn how to contest an assessment.

Q. ­I recently bought a farm that has been in the agricultural assessment program, but I won’t have $10,000 in gross sales by the application deadline. Will I still be eligible for an agricultural assessment in my first year owning the farm?

A. ORPTS Opinion of Counsel, Vol. 6, No. 42 speaks to this situation:

The two-year requirement of sections 305 and 306 of the Agriculture and Markets Law applies to commercial agriculture use of the land but not ownership. A new owner of a parcel of land formerly used in one operation and eligible for an agricultural value assessment may apply for such assessment in the year following acquisition.

An owner who has acquired agricultural land which is to be used in conjunction with an ongoing venture where the acquired land had been used in commercial agricultural production for the two preceding years may also apply for an agricultural value assessment for such land, notwithstanding that such land did not satisfy one or more of the remaining statutory requirements under its former ownership.

For additional details, review the full text of the opinion.

Q. Am I required to provide proof of income every year when renewing?­

A. It is the applicant’s responsibility to make sure their assessor is satisfied the operation meets the income guidelines. As such, the assessor could reasonably request income every year to verify continued eligibility. When submitting Form RP-305-r, Agricultural Assessment Renewal Certification, you will attest that you understand that you must maintain records confirming that each of the statements on the form is true, and you must supply those records to the assessor upon their request.

Q. Are horse boarding operations eligible for agricultural assessments?­

A. Land that supports a commercial horse boarding operation may qualify for an agricultural assessment if the following eligibility requirements are met:

• at least seven acres of land supports the commercial horse boarding operation;
• the operation boards at least 10 horses regardless of ownership; and
• the operation receives $10,000 or more in gross receipts annually in the preceding two years from fees generated through boarding horses or through producing sale of crops, livestock, and livestock products.

In addition, a start-up commercial horse boarding operation may qualify based on annual boarding fees of $10,000 or more in its first or second year.

Note: If the primary onsite function is horseracing, the land is not eligible.

For reference, New York State Agricultural and Markets Law, Section 301 defines commercial equine operation as the following:

an agricultural enterprise, consisting of at least seven acres and stabling at least ten horses, regardless of ownership, that receives ten thousand dollars or more in gross receipts annually from fees generated through the provision of commercial equine activities including, but not limited to riding lessons, trail riding activities or training of horses or through the production for sale of crops, livestock, and livestock products, or through both the provision of such commercial equine activities and such production. Under no circumstances shall this subdivision be construed to include operations whose primary on site function is horse racing. Notwithstanding any other provision of this subdivision, an agricultural enterprise that is proposed or in its first or second year of operation may qualify as a commercial equine operation if it consists of at least seven acres and stables at least ten horses, regardless of ownership, by the end of the first year of operation.

Q. ­Must the 10 horses board on the property for 12 months, or can they board for a portion of the year?

A. In ORPTS Opinion of Counsel, Vol. 11, No. 86 we note that a court has construed AML, section 301(13), as meaning that an eligible commercial horse boarding operation need not ‘be a year-round activity…’

Q. I have been receiving an agricultural assessment, and I am ceasing operations. Do I need to notify my assessor? Will I have to pay a conversion penalty?  

A. To avoid any confusion, we recommend that you notify your assessor, though nothing in the law expressly requires you to do so unless a conversion has occurred. Termination of farming activities is not considered a conversion, so there is no penalty.

However, if you were converting the land to other purposes, notification to the assessor is required and you may be subject to a conversion penalty and an additional fee for failing to timely notify the assessor. For details, see Agricultural assessment program: Farmland that is taken out of agricultural production.

Q. If I move one or more portions of my farmland acreage into solar production, how are property taxes calculated for that property?

A. Land used for solar farms is not generally eligible for an agricultural assessment. The property taxes for the land converted to solar production would be calculated without the benefit of an agricultural assessment. You may wish to ask your assessor for an estimate of the value of the land if converted to solar.

If the land was previously receiving an agricultural assessment, you will be required to pay a penalty for conversion. The penalty equals:

• five times the taxes saved in the most recent year that the land received an agricultural assessment, plus
• six percent per year compounded annually, not to exceed five years of interest.

Note: You must notify your assessor within 90 days, or you will receive additional penalties.

Q. I am adding a solar array to my hayfields, and I will have sheep grazing on them. Would that land still qualify as cropland?­

A. Ultimately, determinations around conversion and qualification rest with the assessor. However, when a solar array is placed on land that has benefited from an agricultural assessment, it is considered to be converted to a non-agricultural use. Therefore, it would be subject to penalty payments for the portion converted.

Although there is an ancillary use for sheep grazing (or in some cases flowers or other crops that are planted for bee forage), under current law the purpose of the land where the solar array is located is for energy production not agricultural production. Therefore, the land would not be eligible for an agricultural assessment. 

Q. If an assessor denies all or part of an agricultural assessment application, can the property owner appeal?

A. Yes. All property owners are entitled to administrative and judicial review of their assessments, including denial of a property tax exemption or, in this case, an agricultural assessment. If you disagree with your assessor’s determination, you can appeal to your local board of assessment review (BAR). You will use Form RP-524, Complaint on Real Property Assessment. As you complete the form, under Grounds for Complaint, complete the Excessive Assessment section.

For details, see Contest your assessment.

If the BAR denies your appeal, you have the right to judicial review of your assessment. You may wish to contact an attorney to discuss a tax certiorari proceeding.

Q. Do assessors have the right to keep the documentation I show them to prove I qualify for the assessment?

A. Government records may be discarded only as authorized by the New York State Archives and Records Administration, which requires exemption applications to be retained for six years.

Q. If an assessor receives a FOIL request, will they provide Schedule F to the individual making the request?

A. FOIL requests are the responsibility of the local records access officer. Data from income tax returns should not be disclosed in response to FOIL requests. When assessors receive a Schedule F or any other income tax return information, they must treat it as confidential material and do their utmost to protect it from unauthorized disclosure.

Q. Are assessors trained to review agricultural assessment applications?

A. All assessors are required to undergo training to become certified. Fundamentals of Assessment Administration is typically the first course assessors take. It is a six-day class, and it includes a full day of training in exemption administration.

In addition, assessors in towns with a minimum amount of agricultural acreage or agricultural assessments are required to take Introduction to Farm Appraisal. (See Certification Requirements: assessors, real property appraisers and candidates for details.) The farm appraisal class is a five-day class, and it includes additional training in agricultural assessments.