Property Tax Exemption Of Farm Buildings & Other Improvements

Property Tax Exemption Of Farm Buildings & Other Improvements - 2003 Page 3

Exemption of Farm Buildings & Other Improvements

Page 3

17. A residence is not exempt if it is located on a tract or contiguous tracts of agricultural land, whether

owned or rented, containing less than 10 acres.

18. A residence located on a tract or contiguous tracts of agricultural land containing 10 acres or more is

not exempt if it is occupied or used by an individual who is not a farmer.

19. A residence is exempt if it is situated on a farm and remains occupied by the retired farmer who

owned and occupied it as a farmer at the time of retirement.

20. If the agricultural land acreage owned by the retired farmer diminishes to less than 10 acres after

retirement, the residence may continue to be exempt, provided that the residence qualified for the

exemption at the time the farmer retired.

21. A residence situated on a farm and occupied by a farmer is not exempt if the farmer and spouse had

non-farm income exceeding $40,000 in each of the three preceding calendar years. This provision

does not apply to a retired farmer or beginning farmer.

*22. “Net income from farming activities” includes income from producing products of the soil or raising

farm animals. It is the taxable farm income for income tax purposes (including CRP payments),

minus income from custom work, plus taxable capital gains from the sale of agricultural products, plus

the basis deducted in calculating capital gains, plus interest and depreciation expenses incurred in the

farming operation. Interest expense includes such items as mortgages on the farm land, buildings,

equipment, etc.

Note: “Net income from farming activities” does not include income from cash rent; mineral leases

or royalties; wages or salaries; interest income from a contract for deed payment from sale of farm

land; interest, the principal of which may have been derived from farm income; or any other income

not specifically defined as farm income for income tax purposes.

23. An assessor may require the occupant of the residence to sign a statement showing the facts

required for the exemption. If an assessor requires a statement from the occupant of any farm

residence, equity and fairness dictate that the assessor should require a statement from the occupant

of every farm residence.

24. If a farmer operates a bed and breakfast facility in the farm residence occupied by that farmer, the

residence is exempt provided the farmer and the residence meet the other qualifications for the

exemption.

* Indicates significant change since last revised

G-10a

Property Tax Exemption Of Farm Buildings & Other Improvements - 2003 Page 3