WHAT IS THE GOAL OF THE LEGISLATIVE PROPOSAL?
The goal is to provide current use tax treatment for small farms that is the same as that provided to large farms. Large farms have current use assessment for all of their land, including the land under and around their farmsteads. This proposal will provide this same tax treatment to small farms, in recognition of the importance of the farmstead to the small farmer.
WHAT IS CURRENT USE?
“Current use” means the present use of the land as opposed to “highest and best use.” “Highest and best use” is the most profitable use for which a property could be used that will yield the highest return. Under the existing system farming is not considered the “highest and best” use, thus the need for the “current use” tax treatment.
The property tax system requires that all property be “valued.” In general property is valued at its “true and fair value” or in other words “highest and best use.” In 1968 a Constitutional Amendment was passed that authorized “current use” valuation in order to preserve, protect, and maintain open space, farmland, and timber and forest land. “Current use” results in a lower valuation than “true and fair value.” And this keeps farmers actively working their land and preserves land.
Taxpayers in the current use program are not exempt from tax nor do they pay a different tax rate; they are subject to a different basis for valuation of their property.
WILL MY PROPERTY TAXES GO UP?
- There will be a slight increase in taxes throughout each taxing district if this proposal is enacted. This tax increase is typically referred to as a “shift.” See table in the Legislation Summary section of this website.
WILL THIS UNFAIRLY BURDEN FARMS OVER 20 ACRES?
- No. The tax treatment of these larger farms will not change. As with all other property owners, both large and small farms will see a tax shift, meaning their tax rates will increase very slightly.
WILL THERE BE ABUSE OF THIS TAX PROGRAM?
- No. The Current Use Agriculture Tax law already has requirements to assure that all program participants are engaged in commercial farming. For farms under 20 acres there are income requirements that participants must meet, which ensures that only actual commercial farms will be allowed in the current use program.
WILL FARM HOMESITES ON ALL FARMS UNDER 20 ACRES WHO ARE ENROLLED IN THE CURRENT USE PROGRAM GET THE FARMSTEAD VALUATION?
- Only farms that use the farmstead in a manner that is integral to the farm business will be eligible for this tax treatment. The same is already the case for farms over 20 acres.