TAXES ON AGRICULTURAL REAL PROPERTY AND OPEN SPACE
What is required to qualify for an Agricultural Use Assessment and what does it all mean?
“Agricultural real property” NRS 361A.020 • Land devoted exclusively to agricultural use for at least 3 consecutive years immediately preceding the assessment date. • Land leased by the owner to another person for agricultural use made up of any lot or parcel which (1) Includes at least 7 acres of land devoted to accepted agricultural practices; or (2) Is contiguous to other agricultural real property owned by the lessee. • Land covered by a residence or necessary to support the residence if it is part of a qualified agricultural parcel.
“Agricultural Use” NRS 361A.030 Must produce a minimum of $5000 from agricultural pursuits during the immediately preceding calendar year by: a. Raising and selling crops, etc. b. Feeding, breeding, management of livestock, poultry, etc. c. Operating a feed lot (min. 50 head cattle etc.) d. Raising fur ‐ bearing animals or bees e. Dairying or f. Any other use determined by the department to constitute Ag use. Current employment of real property includes: land lying fallow for 1 year and land planted in orchards or other perennial prior to maturity.
Assessment of Agricultural Property
NRS 361A.110 Any application for agricultural use assessment must be filed on or before June 1 of any year: With the County Assessor if the property contains 20 acres or more With the Department, if the property contains LESS than 20 acres
NRS 361A.110 & .120 • A new application is required following any change in ownership or conversion to a higher use of any portion of the property. • The application must be made on forms prepared by the Department and must be signed by all owners or their lawful power of attorney. Additional information may be required. • The applicant shall be sent a written notice of the determination within 10 days after determining the applicant’s entitlement to agricultural use assessment. • The application shall be recorded with the county recorder within 10 days after its approval.
Any use other than agricultural use or open- space use NRS 361A.032
“Converted to a higher use” (P.R.E.Z.): 1) A P hysical alteration of the surface enabling a higher use; 2) R ecording of a final map or parcel map which creates one or more parcels not intended for Ag use; 3) The E xistence of a final map or parcel map which creates one or more parcels not intended for Ag use; or 4) A change in Z oning to a higher use made at the request of the owner. NRS 361A.031(1)
What are the different types of AG Property and where can I get more information about it????
Who is authorized to define the classifications and determine the valuations of AG land? Nevada Tax Commission
Ag Land Classifications I Intensive Use C Cultivated Land N Native Meadow Land or Wild Hay Land P Pasture Land G Grazing Land
I Intensive Use • does not depend on the quality of the soil for production • operations whose products do not grow out of the soil but whose operations are carried out entirely on the soil
C Cultivated Land Land developed for agricultural use and is no longer in its natural condition 4 classes that produce during an average year a specified number of tons of alfalfa hay, small grains or the equivalent of other feeds for livestock * First Class : 4 or more tons of alfalfa hay or 1 ½ tons or more of small grains or the equivalent of other feeds Second Class: 3 or more but less than 4 tons of alfalfa hay or 1 ton but less than 1½ tons of small grains or the equivalent of other feeds Third Class: 2 to 3 tons of alfalfa hay or ½ to 1 ton of small grains or the equivalent of other feeds Fourth Class: 1 ½ to 2 tons of alfalfa hay or ½ ton of small grains or the equivalent of other feeds
N Native Meadow Land or Wild Hay Land Irrigated by streams or rivers and has not been cultivated but will yield enough native Wild Hay growth to afford at least one hay cutting each season with average or better than average precipitation * • First Class : Land that produces during an avg year 1 or more tons of hay per acre. • Second Class : Land that produces during an avg year ½ ton or more but less than 1 ton of hay per acre.
P Pasture Land Not “harvested and stored” as with Wild Hay Lands (Native), therefore, the value of Pasture Lands are measured by the “Carrying Capacity” per acre * During an average year the land produces enough feed per acre for a specified number of Animal Units Per Month (AUMs)…. * • First Class : 4 grown cattle (4 AUMs) • Second Class : 3 to 4 grown cattle (3.5 AUMs) Third Class : 2 to 3 grown cattle • (2.5 AUMs) • Fourth Class : 1 to 2 grown cattle (1.5 AUMs)
G Grazing Land Usually lacks irrigation and has a lower carrying capacity per acre than pasture land. It is commonly identified as “range land”, either open or fenced * During an average year, this land produces enough feed… • First Class : on 4 acres or less for 1 grown cow (1/4 up to 1 AUM) • Second Class : on 4 to 6 acres for 1 grown cow (1/4 up to 1/6 AUM) • Third Class : on 6 to 12 acres for 1 grown cow (1/6 up to 1/12 AUM) • Fourth Class : on 12 acres or more for 1 grown cow (1/12 or less AUM) This land is barren or rocky
FARMSTEAD * The v The value of the land in the f lue of the land in the farmst rmstead area co ead area covered b red by a a residence or necessary t residence or necessar y to suppor support a residence is com t a residence is comput uted as ed as taxable v taxable value pursuant t lue pursuant to NRS 36 NRS 361.22 1.227. An Any remaining y remaining farmst rmstead area of an agricultur ead area of an agricultural al pr proper operty that is par ty that is part of the of the operation is v operation is valued b lued by applying applying the same v the same value as the highest lue as the highest land classif land classification used f cation used for that operation. * r that operation. *
Causes for Disqualification of AG property a) Notification by the applicant to remove b) Sale or transfer to an owner making it exempt c) Removal of the agricultural use assessment by the assessor upon discovery that the property is no longer qualifies d) Failure to file an application. Within 30 days after agricultural property becomes disqualified the county assessor shall send written notice NRS 361A.150
When must AG deferred taxes be paid? * After a parcel or any portion of a parcel is converted to a higher use NRS 361A.155 7yrs
Taylor Grazing Act of 1934 Administered by the BLM, a federal grazing fee is charged to people leasing land from the Federal Government. Fees are sent to the U.S. Treasury who redistributes the money. In Nevada, the BLM provides annual payments to the State Controllers Office who then distributes that money to each grazing district. Grazing Advisory Boards from the districts then spend the money on range improvements and range related activities.
Open ‐ Space A program for land preservation, as well as for sites designated as historic by the Office of Historic Preservation
“Open ‐ space real property” NRS 361A.040 Land that…. Is located within an area classified pursuant to NRS 278.250 ( Zoning districts and regulations) and subject to regulations designed to promote the conservation of open space and the protection of other natural and scenic resources from unreasonable impairment and devoted exclusively to open ‐ space use The improvements on the land are used primarily to support the open ‐ space use and not primarily to increase the value of surrounding developed property or secure an immediate monetary return The owner has granted and has an outstanding lease of surface water rights appurtenant to the property to a political subdivision of this State for a municipal use, if the land was agricultural real property at the time the lease was granted. Is used as a golf course
Who decides what qualifies as Open – Space? Within 10 days, the Assessor refers the open ‐ space application (due by June 1) to … The Board of County Commissioners and if required to the governing body of an incorporated city No later than 90 days after receipt the board shall consider the application at a public hearing(but no later than March 31). Within 10 days of approval they must send copies to the Assessor & the applicant and record the order with the Recorder NRS 361A.200
Causes for Disqualification of Open ‐ Space property a) Notification by the applicant to remove b) Sale or transfer to an owner making it exempt c) Removal of the open ‐ space assessment by the assessor, with concurrence of the board, upon discovery that the property is no longer in approved open ‐ space use (other than golf courses) d) Failure to file a new application as provided in NRS 361A.90 NRS 361A.230
Open ‐ Space Valuation The Nevada Tax Commission adopted a formula that grants open ‐ space use assessments (except golf courses) a discount of 9 percent for a term of 3 1/2 years, which yields a discount factor of 0.74 Open ‐ space value thus equals taxable value of the open ‐ space property times a factor of 0.74. Therefore assessed value equals 35 percent of the open ‐ space use value. For open ‐ space historic sites with both land and improvements, apply the 0.74 factor to the taxable value of both land and improvements.
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