Current through Register Vol. 63, No. 9, September 1, 2024
(1) Income From Consumed Products. For
purposes of the income requirement for farmland or a farm parcel outside an
exclusive farm use zone, gross income includes the value of any crop or
livestock used by the owner personally or in the farming operation. The owner
must keep records accurately reflecting both the value and the use of the crop
or livestock in a manner consistent with generally accepted accounting
practices. The value of any crop or livestock used by the owner personally or
in the farming operation is the amount of money the product would have been
sold for in the normal marketing of the crop or livestock by the taxpayer.
However, the value of products consumed, by the owner personally or in the
farming operation, must constitute no more than 49 percent of gross income as
required under ORS 308A.071.
(2) Adjusted Gross Income From Livestock. In
determining gross income from livestock, the purchase cost must be deducted
from the gross sales price.
(3)
Burden of Proving Income. The burden of proving that property that is not
within an exclusive farm use zone meets the gross income requirements of ORS
308A.071 is upon the owner or
person claiming special assessment. This burden is met if information
establishing sufficient gross income is supplied to the county assessor as
provided below. A failure to provide the required income information to the
county assessor constitutes grounds for disqualification under
308A.116(1)(c).
(4) Income
Information. The following procedures apply if the assessor lacks sufficient
information on March 1 to support a determination that land not in an EFU zone
qualifies for special farm use assessment.
(a)
On or before March 1, the assessor must send notice to the owner or person
claiming special assessment of the need to provide income information for
property subject to special assessment. The assessor must include an income
information questionnaire with the notice. The property owner must use the
questionnaire to provide income information to the county assessor. The
property owner must provide the income information to the county assessor no
later than April 15.
(b) The
assessor must send the notice and the questionnaire to the last known address
of record of the owner or person claiming special assessment for the subject
property. The notice and questionnaire must be in a form approved by the
Department of Revenue.
(c) If the
information provided to the county assessor is sufficient to determine whether
or not the subject property is qualified for special assessment, the assessor
must take the appropriate action.
(d) If the information provided to the county
assessor is insufficient to make a determination as to the qualification of the
subject property for special assessment, or if no information is provided, the
assessor must send a notice to the last known address of record for the owner
or person claiming special assessment. The notice must be in a form approved by
the Department of Revenue and must include:
(A) A statement of the assessor's intent to
disqualify the subject property; and
(B) A statement that within 30 days after the
date of the mailing of the notice, the owner or person claiming special
assessment may appear and show cause why the property should not be
disqualified.
(e) In
determining whether the subject property qualifies for special assessment, the
assessor must take into consideration information obtained through the income
information questionnaire, the show cause hearing and the county assessor's
records.
(f) If property is
disqualified from special assessment solely because no income information was
provided by April 15, or within the 30 days of assessor's notice of intent to
disqualify, the property owner may file an appeal with the Magistrate Division
of the Tax Court.
(A) "Good and sufficient
cause" has the meaning given in OAR 150-307-0500. The failure of the county
assessor to provide the notice required in subsection (a) of this rule on or
before March 1 constitutes good and sufficient cause for the owner's failure to
provide timely income information.
(B) The procedural requirements contained in
this rule are in addition to the requirements of ORS
308A.718.
(C) Nothing contained in this rule alters the
right of a person claiming special assessment to deferral and abatement of
additional tax, pursuant to ORS
308A.119.
(D) Nothing contained in this rule precludes
the assessor from continuing special assessment on farmland if the assessor
determines that the property meets the qualifications.
(5) The assessor may send a copy
of the income information received by the assessor under subsection (3) of this
rule to the Department of Revenue.
(6) Examples: Satisfying income requirements:
(a) A ten acre parcel in an area not zoned
EFU has never been used for farm purposes. For this parcel to qualify for
special farm use assessment, the owner must develop an income history from farm
uses of the parcel. The parcel will meet the income requirements of ORS
308A.071(2)(a)
if it produces at least $1,000 gross income in each of the last three
consecutive years or in any three of the last five consecutive years.
(b) A ten acre parcel was segregated from a
larger farm one year ago. The land was not farmed during the year following
segregation. In order to qualify for farm use assessment, the parcel must be
farmed for two successive years (ORS
308A.068(1))
and meet the income requirement of at least $1,000 in one of the two years
(assuming the large farm met the income requirement before the ten acre parcel
was segregated).
(c) A four acre
parcel in an area not zoned EFU has been farmed continually. The income has
never exceeded $300. In order to qualify for special farm use assessment, the
parcel must produce at least $650 in gross income per year for any three years
during any consecutive five year period.
(d) A twenty two acre parcel in an area not
zoned EFU includes a ten acre farm woodlot, four and one-half acres of three
year old cherry trees, five acres of pasture, two acres of wasteland and a
one-half acre non-farm homesite. The five acres of pasture must have produced
at least $650 gross income in one of the last three years (assuming the
property met the income requirement in the two years preceding the planting of
the cherry trees) to remain qualified for special assessment. The one-half acre
non-farm homesite (at market), the immature cherry orchard (see ORS
308A.056(3)(c)),
the farm woodlot (see 308A.056(3)(h), and the wasteland (see 308A.074)) are not
counted in determining the number of acres to be considered under
308A.071(2)(a). The wasteland in a non-EFU zone does not qualify because it is
not currently employed under 308A.056(3), and should not be in the calculation
for the income test.
NOTE: In order for the two acres of wasteland to be assessed at
its farm use value under ORS
308A.074, and the homesite to be
valued under ORS 308A.256, the owners must meet
an adjusted gross income test and file an annual application.
(7) The farmland owner or the
operator of the farm unit must file the required excise or income tax returns
including a Schedule F and, if applicable, a schedule showing rental income or
expenses of each farmland owner or the operator of the farm unit.
(a) The assessor may require the farmland
owner or farm unit operator provide a copy of the income tax returns and
schedules showing farm income. Failure to provide required income information
including copies of the required tax returns and schedules is grounds for
disqualification.
(b) Copies of
income tax returns and schedules of farm income are confidential and must be
safeguarded in accordance with OAR 150-192-0500.
Statutory/Other Authority: ORS
305.100
Statutes/Other Implemented: ORS
308.372 &
308A.071
