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Assessment and Taxation

 

SPECIAL ASSESSMENT PROGRAMS
FOR LAND IN WESTERN OREGON

For assistance with these programs call Matt Pitcher at the Linn County Assessor's Office

(541) 967-3808 ext 2628.

FARM DEFERRAL: For exclusive farm use zone (EFU) and non-exclusive farm use zone. Definition: Currently employed; primary purpose for profit; raising, harvesting, and selling crops; feeding, breeding, management and sale of, or the produce of, livestock, poultry, fur bearing animals or honeybees; dairying and the sales of dairy products; any other agricultural or horticultural use or animal husbandry, or any combination (check with assessor) thereof; the preparation and storage of the products raised on such land for human use and animal use and disposal by marketing or otherwise; stabling/boarding and training of horses; the propagation, cultivation, maintenance and harvesting of aquatic species; Christmas trees; and hybrid poplar. For the statutory definition see ORS 215.203

EXCLUSIVE FARM USE ZONE - QUALIFICATION: No waiting period; evidence of prior years use and current employment in farm use (Jan. 1 qualification date - must show evidence of farm use in prior year); prove intent to make a profit by holding products for sale (no dollar amount required - operating at a loss ok); customary farm practice required; farm related homesite allowed; qualified wasteland included; ponds included; woodlot up to 20 acres included. Formal application not required but informal questionnaire and visual inspection necessary. Disqualification: For non use, underutilization, voluntary zone change, use change, establishment of a non-farm dwelling (planning dept. can order disqualification) and owner request (non-use required). Penalty of back taxes (10 years outside UGB, 5 years inside UGB) for change of use (development), by order of planning dept. (non farm dwelling), or zone change without rollover. Owner may voluntarily pay penalty. No penalty if farm use discontinued without change of use. Idle farmland is not considered a change of use.

NON-EXCLUSIVE FARM USE ZONE - QUALIFICATION: Income requirement for owner operator, three year waiting period if no prior use, otherwise prove income 3 out of 5 prior years including 2 year prior use; 6.5 acres or less $650, 7-30 acres $100 per acre, more than 30 acres $3000 (income is gross less purchase cost, if any, for animals); income requirement for tenant operator is less restrictive-call assessor for details; perennials exempted from income requirement until mature (three year waiting period); farm related homesite and wasteland have special income requirements - call assessor for details; ponds included; woodlot up to 20 acres included; wasteland not included. Formal application by April 1. Disqualification: For non use, underutilization, insufficient income, filing of subdivision plat, transfer to an ownership making it exempt, and owner request. Collection of deferred taxes (up to 5 years) for change of use (development); planning dept. cannot order disqualification; zone change does not trigger disqualification; owner may voluntarily pay penalty. No penalty if farm use suspended without change of use. Idle farmland is not considered a change of use. Download: Application

General information for both programs: Farm use activities do not include: 1) Pleasure horses 2) Dogs 3) Storage of any farm product which is not raised on the property or within the farm unit, straw excepted 4) Unused land that is economically feasible to farm or ranch. 5) Fallow land that has not been prepared. Other: Farm use can include up to 20 acres of a woodlot if adjacent. Forested land over 20 acres, can be placed in forest deferral by application.

Additional information regarding income requirements for non-exclusive farm use zone farmland:

1) Do not include sales or consumption of timber or firewood 2) Do not count unsold animals or crops as income 3) To determine income from livestock, the purchase price must be deducted from the sales price to arrive at the adjusted gross income 4) No more than 49% of crops and/or livestock can be used for the farm operation or for personal consumption and the remaining 51% must be sold. 5) Rent is not farm use income unless leased to a farm operator and certain qualifications have been met.

The Penalty: The legislature uses the words "penalty" and "potential additional tax liability" but in reality itís the collection of the "deferred taxes". These "deferred taxes" are based upon the difference in taxes assessed against the land and the taxes that would otherwise have been assessed against the land had the land not been in farm use. In other words, it is the collection of the deferred taxes for a specified number of years. Due to the method legislated to calculate the penalty, the dollar amount can fluctuate dramatically ($100 to $1000) per acre. As previously stated, upon or subsequent to a disqualification, the penalty for specially assessed farm land becomes a collectable lien upon change of use, but remains as a dormant lien and not collectible, when land is disqualified for reasons other than change of use.

FOREST DEFERRAL: For any zone (EFU and non EFU). Definition: "Forest land is land which either is being held or used predominantly to grow and harvest trees of a marketable species and has been designated as forest land or is land the highest and best use of which is to grow and harvest such trees".

QUALIFICATION: Predominant purpose to grow and harvest trees of a marketable species. Marketable species in Western Oregon includes, all coniferous species except Monterey Cypress. For hardwoods: alder, ash, cottonwood, maple and oak. 200 trees per acre for new plantings after 1991. For existing stands the number of trees per acre is based on a sliding scale depending on size. Five year planting plan allowed at 20% per year after initial 2 acres of contiguous trees established. Formal application by April 1. Trees must be free to grow (no overtopping vegetation) for 5 years. Disqualification: When the assessor or state forester discovers that the land is no longer being managed as forest land, including trees not free to grow, and insufficient stocking; transfer to ownership making it exempt; filing a subdivision plat and owner request. All Designated Forest disqualificationís are collectible, except land that has been classified by the assessor as highest and best use forestland.

NOTE: The following is a quote from the forest application: "IRS publication 523 for 1996, page 168 states "If you sell the whole property, you postpone only the tax on the part used as your home". Before you submit the application for designation of land as forest land, it is suggested that you get advice regarding the possible tax consequences upon the sale of your property. By answering yes to the first question of the forest application you are declaring that the predominant purpose of your property is to grow and harvest timber rather than residential use, which may result in a tax consequence upon the sale of your property.

OTHER SPECIAL ASSESSMENT PROGRAMS:

Open Space Lands: The area in which the designation is desired must be zoned "open space". For parcels zoned other than open space, an amendment to the comprehensive plan is required. Land designated as open space is valued at the market according to its present use (park, sanctuary, golf course, etc.) and not as itís highest and best use. Formal application by Dec. 31.

Riparian lands: Only the area located within 100 feet landward of nonaquatic vegetation along streambanks. Application through the assessor by Dec. 31. Application is processed by the Dept. of Fish and Wildlife. The land designated riparian would be exempt.

Natural Heritage Program: Division of State Lands may accept gifts or donations of real property to create a system of natural heritage conservation areas. If accepted, individuals and organizations voluntarily enter into a management agreement with the State Land Board. The land is dedicated as a conservation area and will be exempt from property tax upon approved application to the assessor.

ACP, CRP, etc.: Agricultural Conservation Program (annual set aside for farm land for the purpose of erosion control, water quality, establishment of wildlife habitat and timberland); Conservation Reserve Program (set aside of highly erodible farm land for 10 years. Also to cut production); Land that has been set aside and subject to any farm-related government program (See 215.203 (2) (b) (A)) and documentation from the governmental agency describing the area, then such land will qualify as special wasteland or farmland and receive the appropriate value which will recognize the restriction to the land use or receive a specially assessed value.

Wetland: Wetlands have been identified on national and local maps. The assessor cannot recognize areas delineated on the national map, but will consider all areas delineated on local maps created by the city and county planning departments. When proper documentation (a letter from the planning dept.) and description of locally mapped areas is submitted, the assessor will value such area, recognizing the restriction.


For assistance with these programs call Matt Pitcher at the Linn County Assessor's Office

(541) 967-3808 ext 2628.