Agricultural Land Classification
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This is a general guide pertaining to agricultural land classification to help citizens understand some of the complexities of this subject. It is not the opinion of the Assessor with respect to any particular property and cannot be cited as authority for reclassification of land. Classification of land as " agricultural land" is done on a case by case basis applying the Colorado Constitution, Colorado Revised Statutes and relevant court cases.
House Bill 11-1146
In 2012 the State Legislature passed House Bill 11-1146 requiring that a residence be integral to an agricultural operation in order for the land underlying the residence to be classified as agricultural land. If the residence is not integral, a residential market value must be assigned to the land upon which the residence is located (up to two acres for each residence on the parcel) for property tax purposes. This residential land will receive the lower 7.96% residential assessment rate.
In order for a property to be classified as "agricultural land" by the Assessor, the property must qualify for such classification under Colorado law, the owner must submit documentation of such qualification to the Assessor's Office, and the land must show signs of agricultural use when physically inspected.
The land may be leased to a non-owner who conducts qualifying agricultural uses on the land and still qualify for "agricultural land" classification.
The zoning of the property is not controlling, rather it is the actual use of the property that determines whether or not it qualifies as "agricultural land."
There are a number of ways for land to be qualified as "agricultural land" including use as a farm or a ranch or for the production of timber, and non-use of the land because of conservation easements. Each of these cases is discussed below.
Qualifying as a Farm or Ranch
Colorado Statutory Provisions:
"...(I) A parcel of land, whether located in an incorporated or unincorporated area and regardless of the uses for which such land is zoned, that was used the previous two years and presently is used as a farm or ranch, as defined in subsections (3.5) and (13.5) of this section ...." 39-1-102(1.6)(a),C.R.S.
"(3.5) "Farm" means a parcel of land which is used to produce agricultural products that originate from the land's productivity for the primary purpose of obtaining a monetary profit." 39-1-102, C.R.S.
"1(13.5) "Ranch" means a parcel of land which is used for grazing livestock for the primary purpose of obtaining a monetary profit. For the purposes of this subsection (1 3.5), "livestock" means domestic animals which are used for food for human or animal consumption, breeding, draft, or profit." 39-1-102(13.5),C.R.S.
A farm must have agricultural products grown in the soil. Anything grown above ground in beds or containers is considered other agricultural and not qualifying. It must have the appearance of a farm and not just the typical residential garden. Horticulture operations that would qualify for an agricultural designation include sod farms, tree farms, orchard operations and floriculture where the products are planted directly in the soil, grown, harvested and sold for the primary purpose of obtaining a monetary profit. The occasional removal and planting of trees does not qualify as a tree farm for the agricultural designation. Tree farms are usually an area where trees are planted in rows, cultivated, trimmed with periodic applications of fertilizer and pesticides.
Some examples of agricultural animals that often qualify if they graze on the land and if that land is primarily used for such purposes for the production of profit are: cattle; llamas or alpacas (either for breeding or wool production); sheep (for food or wool), horses (horse breeding or draft use only); and goats (for food or milk). Some examples of non-qualifying agricultural activities are: bees (apiaries); chickens or exotic birds; hogs; pleasure horses; and horse boarding.
Qualifying as Land Used for Forestry
Colorado Statutory Provisions:
" . . . (II) A parcel of land that consists of at lease forty acres, that is forest land, that is used to produce wood products that originate form the productivity of such land for the primary purpose of obtaining a monetary profit, that is subject to a forest management plan . . . "
The land must be at least 40 acres in size with a qualifying Forest Management Plan. The sale of firewood alone does not qualify, regardless of size. The occasional removal and planting of trees does not qualify for the agricultural designation. A discussion of what constitutes "forest land "and "forest management plan" and other definitions is at 39-1-102, C.R.S. All forest lands eligible for agricultural land designation will be determined by the Colorado State Forest Service (CSFS).
Qualifying as Land Subject to a Conservation Easement
Colorado Statutory Provisions:
" . . . (III) A parcel of land that consists of at lease eighty acre, or less than eighty acres if such parcel does not contain any residential improvements, and that is subject to a perpetual conservation easement, if such land was classified by the assessor as agricultural . . . at the time such easement was granted . . ." 39-1-102(1.6)(a), C.R.S.
To qualify, the conservation easement must meet all of the tests in 39-1-102, C.R.S., which require that the easement be to a "qualified organization" and exclusively for "conservation purposes." The easement must also describe all current and contemplated future uses of the land none of which may be nonagricultural commercial, residential, or any other purposes not consistent with a conservation easement.
Documentation of Use
Owners claiming agricultural land status for their land must complete and return an agricultural land classification questionnaire. The assessor can request additional documentation for further analysis of parcels. However, failure of the taxpayer to supply information requested cannot be the sole reason for denying the "agricultural land " classification. Such additional documentation that may prove helpful in establishing a claim for "agricultural land " classification includes:
1. IRS Form 1 O4OF (or equivalent).
3. Receipts for services rendered and items purchased relevant to
the agricultural operation.
4. Brand inspection certificates.
5. Enrollment documents from Federal agricultural programs.
6. Ownership of irrigation water shares.
7. Well permit that allows for livestock watering.
8. Sales invoices of agricultural products or livestock sold.
Providing documentation that the grazing animals satisfy the majority of the below criteria provides a strong case for qualifying the land as a ranch.
1. The animals can be bought and sold, i.e. a brand inspection certificate
or a bill of sale is provided when transferring ownership of the animal.
2. The animals are not the property of the state of Colorado, i.e. all wildlife
(undomesticated animals) are the property of the state and permission
is required of the State to own and confine these species which are
typically found in the wild.
3. Veterinary and other services are provided for the health of the
4. The animals are confined to the property and shelter may be provided.
5. The animals are intended to serve humans in some capacity as food for
animal or human consumption, for draft, for breeding for resale, or used
for profit as in selling the animal's coat. 6. The animals are identifiable
by brands, tags, or tattoos. grazing animals.
The landowner need not own the livestock to qualify as a ranch. However, the
owner of the livestock must be engaged in an agricultural endeavor from the raising of the livestock.
Physical inspections may be conducted to substantiate the use as agricultural. The following are examples of items that may be considered:
1. Grazing livestock or recent evidence of grazing activity
2. Preparation/ planting/ harvesting/ selling crops
3. Topography and physical geology of the land.
5. Farm/ ranch outbuildings.
6. Agricultural machinery and equipment.
7. Fence, livestock water, irrigation ditches and canals.
8. Evidence of soil conservation practices.
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Last Modified: Apr 1, 2012 10:32 PM
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