Chapter 1
In 1961, the Oregon Legislature began to adopt farm use special assessment laws. The Oregon Legislature, administrative rules, and Tax Court, Attorney General, and the Department of Revenue decisions have modified or clarified these special assessment laws since then. This comprehensive manual details the complexities of this program. The legislative intent can be found in Oregon Revised Statute (ORS) 308A.050 and is summarized as follows:
Links:
ORS 308A.050: The Legislative Assembly recognizes that agriculture and related land uses contribute significantly to Oregon's character and economy and is in the interest of all citizens of this state. Valuation of farm properties is based on agricultural production capability. Therefore, it is the declared intent of the Legislative Assembly that bona fide farm properties be assessed for ad valorem property tax purposes at a value that is exclusive of values attributable to urban influences or speculative purposes.
Exclusive farm use (EFU) zoned land qualifies for "farm use" special assessment provided the owner maintains an acceptable farm practice with the intent to make a profit as defined by ORS 308A.056. Landowners do not need to apply for land to be qualified and assessed as farm use.
No application is required to qualify and assess land for farm use special assessment in an EFU zone when the owner is using the land exclusively for "farm use" with the intent to make a profit as defined and specified in ORS 308A.056. Exclusive use does not mean only use. Incidental non-farm uses are allowed provided the non-farm uses do not interfere or preclude the land from meeting farm use requirements. If incidental uses become the predominant use of the land, the land or any portion may be subject to disqualification.
Qualification for special assessment is determined as of the January 1 assessment date. Land beginning a qualifying farm use on January 1 or later of an assessment year will be qualified in the next assessment year provided the land continues in a qualifying "farm use." Each acre of land in a tax account is reviewed for qualification. Any acres not being used for farm use defined under ORS 308A.056 will not be included in farm use special assessment. [ORS 308A.062]
Non-EFU
Non-exclusive farm use (non-EFU) land must also maintain an acceptable farm practice with the intent to make a profit as defined by ORS 308A.056. Additionally, non-EFU landowners must file an application with the county assessor in the first year the property qualifies for special assessment. after the initial application, the farm operation must meet minimum gross income requirements.
Non-EFU land requires an application under ORS 308A.077 and must meet the same ORS 308A.056 "farm use" criteria as EFU farmland. In addition, non-EFU land must meet minimum income requirements of ORS 308A.071.
Farmland is not used exclusively for farm use unless in three out of the five non-flood and non-drought calendar years immediately preceding the January 1 assessment date the farmland was operated as a part of a farm unit that has produced a gross income from farm uses.
The farming activity needs to be in accordance with an "accepted farming practice," which means the farming is conducted in a "mode of operation that is common to farms of a similar nature, necessary for the operation of such farms to obtain a profit in money, and customarily utilized in conjunction with farm use."
Process each disqualification with the understanding that the action can be appealed. It is very important to select the correct statutory reason and to follow the appropriate procedures for disqualification. You will need to be prepared to defend the action in court. Failure to cite the correct statute for disqualification could render the disqualification invalid. The objective is to provide accurate administration of the special assessment programs.
DISQUALIFICATION DETERMINATION
When reviewing an account over time from year to year, portions of an account may change as other portions of the same account continue to qualify, or change to a different special assessment, or may be disqualified. Look at each year and each acre of assessment individually for any changes that may have occurred.
When land is removed from special assessment, the first step in the process is to determine what is to be disqualified and the reason for the disqualification. You need to go to the statutes that apply to the land use. If a portion of a property is EFU, and a portion is non-EFU land, and a portion is forestland, then disqualify the EFU portions under the EFU statutes and the non-EFU portions under the non-EFU statutes and the forestland portions under the forest use statutes.
Types of farm use disqualifications
EFU
• No longer in farm use
• Land is removed from an EFU zone
• Non-farm dwelling (ORS 215.236)
NON-EFU
• Taxpayer request
• Land is sold or transferred to an ownership making the land exempt
• No longer in use
• No longer in use for failure to meet income requirements under ORS 308A.071
• Recording a subdivision plat
As seen above, there are a number of disqualification types, each exhibiting unique characteristics, considerations and statutory requirements. However, only one basis for disqualification depends almost exclusively upon inspection by an appraiser and that is determining a property is no longer in farm use. All other types of disqualification are determined by conditions that do not require appraiser judgment. As a result, developing consistent criteria to demonstrate that property is no longer in farm use becomes critical.
Disqualification after one full calendar year of "no longer in use."
If the farm use appears to no longer be in a qualifying use but is compatible with continuing farm use or wants to continue farm use, then the assessor may want to wait until there is a full calendar year of non-qualifying farm use before proceeding with the disqualification. In this case it is recommended to notify and communicate with the taxpayer and if the use is questionable give the taxpayer an opportunity to bring the property into compliance. Flag the file and disqualify when there is a full calendar year of non-qualifying farm use or when the assessor is convinced the farm use will no longer continue to qualify. In the event of an appeal, the assessor would then be able to demonstrate they have worked with the tax payer and can support the reason for the disqualification.
Before a property is disqualified, OAR 150-308A.113 (EFU) and 150-308A.116 (non-EFU) requires the assessor must:
• Make a reasonable effort to contact the owner, owner's agent or person using the land
• Make a site inspection of the property
• Request the recent history of the property's use
• Maintain a record of the inspection, any contact letters or other means of contact between the assessor and the taxpayer, and notations of the conditions found that indicate a lack of a qualifying farm use. This information must be maintained in the assessor's office for a minimum of three years.
TAKE QUIZ
Qualification
EFUExclusive farm use (EFU) zoned land qualifies for "farm use" special assessment provided the owner maintains an acceptable farm practice with the intent to make a profit as defined by ORS 308A.056. Landowners do not need to apply for land to be qualified and assessed as farm use.
No application is required to qualify and assess land for farm use special assessment in an EFU zone when the owner is using the land exclusively for "farm use" with the intent to make a profit as defined and specified in ORS 308A.056. Exclusive use does not mean only use. Incidental non-farm uses are allowed provided the non-farm uses do not interfere or preclude the land from meeting farm use requirements. If incidental uses become the predominant use of the land, the land or any portion may be subject to disqualification.
Qualification for special assessment is determined as of the January 1 assessment date. Land beginning a qualifying farm use on January 1 or later of an assessment year will be qualified in the next assessment year provided the land continues in a qualifying "farm use." Each acre of land in a tax account is reviewed for qualification. Any acres not being used for farm use defined under ORS 308A.056 will not be included in farm use special assessment. [ORS 308A.062]
Non-EFU
Non-exclusive farm use (non-EFU) land must also maintain an acceptable farm practice with the intent to make a profit as defined by ORS 308A.056. Additionally, non-EFU landowners must file an application with the county assessor in the first year the property qualifies for special assessment. after the initial application, the farm operation must meet minimum gross income requirements.
Non-EFU land requires an application under ORS 308A.077 and must meet the same ORS 308A.056 "farm use" criteria as EFU farmland. In addition, non-EFU land must meet minimum income requirements of ORS 308A.071.
Farmland is not used exclusively for farm use unless in three out of the five non-flood and non-drought calendar years immediately preceding the January 1 assessment date the farmland was operated as a part of a farm unit that has produced a gross income from farm uses.
- Income requirements are based upon $100/acre annually
- Minimum of $650 annual income required
- Maximum of $3000 annual income required
- Homesite qualifies only if at least 50% of adjusted gross income comes from the farm
- Wasteland qualifies (by application) only if at least 50% of adjusted gross income comes from the farmfarm
The farming activity needs to be in accordance with an "accepted farming practice," which means the farming is conducted in a "mode of operation that is common to farms of a similar nature, necessary for the operation of such farms to obtain a profit in money, and customarily utilized in conjunction with farm use."
DISQUALIFICATION
CONSIDERATIONS PRIOR TO DISQUALIFICATIONProcess each disqualification with the understanding that the action can be appealed. It is very important to select the correct statutory reason and to follow the appropriate procedures for disqualification. You will need to be prepared to defend the action in court. Failure to cite the correct statute for disqualification could render the disqualification invalid. The objective is to provide accurate administration of the special assessment programs.
DISQUALIFICATION DETERMINATION
When reviewing an account over time from year to year, portions of an account may change as other portions of the same account continue to qualify, or change to a different special assessment, or may be disqualified. Look at each year and each acre of assessment individually for any changes that may have occurred.
When land is removed from special assessment, the first step in the process is to determine what is to be disqualified and the reason for the disqualification. You need to go to the statutes that apply to the land use. If a portion of a property is EFU, and a portion is non-EFU land, and a portion is forestland, then disqualify the EFU portions under the EFU statutes and the non-EFU portions under the non-EFU statutes and the forestland portions under the forest use statutes.
Types of farm use disqualifications
EFU
• No longer in farm use
• Land is removed from an EFU zone
• Non-farm dwelling (ORS 215.236)
NON-EFU
• Taxpayer request
• Land is sold or transferred to an ownership making the land exempt
• No longer in use
• No longer in use for failure to meet income requirements under ORS 308A.071
• Recording a subdivision plat
As seen above, there are a number of disqualification types, each exhibiting unique characteristics, considerations and statutory requirements. However, only one basis for disqualification depends almost exclusively upon inspection by an appraiser and that is determining a property is no longer in farm use. All other types of disqualification are determined by conditions that do not require appraiser judgment. As a result, developing consistent criteria to demonstrate that property is no longer in farm use becomes critical.
Disqualification after one full calendar year of "no longer in use."
If the farm use appears to no longer be in a qualifying use but is compatible with continuing farm use or wants to continue farm use, then the assessor may want to wait until there is a full calendar year of non-qualifying farm use before proceeding with the disqualification. In this case it is recommended to notify and communicate with the taxpayer and if the use is questionable give the taxpayer an opportunity to bring the property into compliance. Flag the file and disqualify when there is a full calendar year of non-qualifying farm use or when the assessor is convinced the farm use will no longer continue to qualify. In the event of an appeal, the assessor would then be able to demonstrate they have worked with the tax payer and can support the reason for the disqualification.
Before a property is disqualified, OAR 150-308A.113 (EFU) and 150-308A.116 (non-EFU) requires the assessor must:
• Make a reasonable effort to contact the owner, owner's agent or person using the land
• Make a site inspection of the property
• Request the recent history of the property's use
• Maintain a record of the inspection, any contact letters or other means of contact between the assessor and the taxpayer, and notations of the conditions found that indicate a lack of a qualifying farm use. This information must be maintained in the assessor's office for a minimum of three years.
TAKE QUIZ
ORS 308A.050: The Legislative Assembly recognizes that agriculture and related land uses contribute significantly to Oregon's character and economy and is in the interest of all citizens of this state. Valuation of farm properties is based on agricultural production capability. Therefore, it is the declared intent of the Legislative Assembly that bona fide farm properties be assessed for ad valorem property tax purposes at a value that is exclusive of values attributable to urban influences or speculative purposes.
Exclusive farm use (EFU) zoned land qualifies for "farm use" special assessment provided the owner maintains an acceptable farm practice with the intent to make a profit as defined by ORS 308A.056. Landowners do not need to apply for land to be qualified and assessed as farm use.
No application is required to qualify and assess land for farm use special assessment in an EFU zone when the owner is using the land exclusively for "farm use" with the intent to make a profit as defined and specified in ORS 308A.056. Exclusive use does not mean only use. Incidental non-farm uses are allowed provided the non-farm uses do not interfere or preclude the land from meeting farm use requirements. If incidental uses become the predominant use of the land, the land or any portion may be subject to disqualification.
Qualification for special assessment is determined as of the January 1 assessment date. Land beginning a qualifying farm use on January 1 or later of an assessment year will be qualified in the next assessment year provided the land continues in a qualifying "farm use." Each acre of land in a tax account is reviewed for qualification. Any acres not being used for farm use defined under ORS 308A.056 will not be included in farm use special assessment. [ORS 308A.062]
Non-EFU
Non-exclusive farm use (non-EFU) land must also maintain an acceptable farm practice with the intent to make a profit as defined by ORS 308A.056. Additionally, non-EFU landowners must file an application with the county assessor in the first year the property qualifies for special assessment. after the initial application, the farm operation must meet minimum gross income requirements.
Non-EFU land requires an application under ORS 308A.077 and must meet the same ORS 308A.056 "farm use" criteria as EFU farmland. In addition, non-EFU land must meet minimum income requirements of ORS 308A.071.
Farmland is not used exclusively for farm use unless in three out of the five non-flood and non-drought calendar years immediately preceding the January 1 assessment date the farmland was operated as a part of a farm unit that has produced a gross income from farm uses.
The farming activity needs to be in accordance with an "accepted farming practice," which means the farming is conducted in a "mode of operation that is common to farms of a similar nature, necessary for the operation of such farms to obtain a profit in money, and customarily utilized in conjunction with farm use."
Process each disqualification with the understanding that the action can be appealed. It is very important to select the correct statutory reason and to follow the appropriate procedures for disqualification. You will need to be prepared to defend the action in court. Failure to cite the correct statute for disqualification could render the disqualification invalid. The objective is to provide accurate administration of the special assessment programs.
DISQUALIFICATION DETERMINATION
When reviewing an account over time from year to year, portions of an account may change as other portions of the same account continue to qualify, or change to a different special assessment, or may be disqualified. Look at each year and each acre of assessment individually for any changes that may have occurred.
When land is removed from special assessment, the first step in the process is to determine what is to be disqualified and the reason for the disqualification. You need to go to the statutes that apply to the land use. If a portion of a property is EFU, and a portion is non-EFU land, and a portion is forestland, then disqualify the EFU portions under the EFU statutes and the non-EFU portions under the non-EFU statutes and the forestland portions under the forest use statutes.
Types of farm use disqualifications
EFU
• No longer in farm use
• Land is removed from an EFU zone
• Non-farm dwelling (ORS 215.236)
NON-EFU
• Taxpayer request
• Land is sold or transferred to an ownership making the land exempt
• No longer in use
• No longer in use for failure to meet income requirements under ORS 308A.071
• Recording a subdivision plat
As seen above, there are a number of disqualification types, each exhibiting unique characteristics, considerations and statutory requirements. However, only one basis for disqualification depends almost exclusively upon inspection by an appraiser and that is determining a property is no longer in farm use. All other types of disqualification are determined by conditions that do not require appraiser judgment. As a result, developing consistent criteria to demonstrate that property is no longer in farm use becomes critical.
Disqualification after one full calendar year of "no longer in use."
If the farm use appears to no longer be in a qualifying use but is compatible with continuing farm use or wants to continue farm use, then the assessor may want to wait until there is a full calendar year of non-qualifying farm use before proceeding with the disqualification. In this case it is recommended to notify and communicate with the taxpayer and if the use is questionable give the taxpayer an opportunity to bring the property into compliance. Flag the file and disqualify when there is a full calendar year of non-qualifying farm use or when the assessor is convinced the farm use will no longer continue to qualify. In the event of an appeal, the assessor would then be able to demonstrate they have worked with the tax payer and can support the reason for the disqualification.
Before a property is disqualified, OAR 150-308A.113 (EFU) and 150-308A.116 (non-EFU) requires the assessor must:
• Make a reasonable effort to contact the owner, owner's agent or person using the land
• Make a site inspection of the property
• Request the recent history of the property's use
• Maintain a record of the inspection, any contact letters or other means of contact between the assessor and the taxpayer, and notations of the conditions found that indicate a lack of a qualifying farm use. This information must be maintained in the assessor's office for a minimum of three years.
TAKE QUIZ
Qualification
EFUExclusive farm use (EFU) zoned land qualifies for "farm use" special assessment provided the owner maintains an acceptable farm practice with the intent to make a profit as defined by ORS 308A.056. Landowners do not need to apply for land to be qualified and assessed as farm use.
No application is required to qualify and assess land for farm use special assessment in an EFU zone when the owner is using the land exclusively for "farm use" with the intent to make a profit as defined and specified in ORS 308A.056. Exclusive use does not mean only use. Incidental non-farm uses are allowed provided the non-farm uses do not interfere or preclude the land from meeting farm use requirements. If incidental uses become the predominant use of the land, the land or any portion may be subject to disqualification.
Qualification for special assessment is determined as of the January 1 assessment date. Land beginning a qualifying farm use on January 1 or later of an assessment year will be qualified in the next assessment year provided the land continues in a qualifying "farm use." Each acre of land in a tax account is reviewed for qualification. Any acres not being used for farm use defined under ORS 308A.056 will not be included in farm use special assessment. [ORS 308A.062]
Non-EFU
Non-exclusive farm use (non-EFU) land must also maintain an acceptable farm practice with the intent to make a profit as defined by ORS 308A.056. Additionally, non-EFU landowners must file an application with the county assessor in the first year the property qualifies for special assessment. after the initial application, the farm operation must meet minimum gross income requirements.
Non-EFU land requires an application under ORS 308A.077 and must meet the same ORS 308A.056 "farm use" criteria as EFU farmland. In addition, non-EFU land must meet minimum income requirements of ORS 308A.071.
Farmland is not used exclusively for farm use unless in three out of the five non-flood and non-drought calendar years immediately preceding the January 1 assessment date the farmland was operated as a part of a farm unit that has produced a gross income from farm uses.
- Income requirements are based upon $100/acre annually
- Minimum of $650 annual income required
- Maximum of $3000 annual income required
- Homesite qualifies only if at least 50% of adjusted gross income comes from the farm
- Wasteland qualifies (by application) only if at least 50% of adjusted gross income comes from the farmfarm
The farming activity needs to be in accordance with an "accepted farming practice," which means the farming is conducted in a "mode of operation that is common to farms of a similar nature, necessary for the operation of such farms to obtain a profit in money, and customarily utilized in conjunction with farm use."
DISQUALIFICATION
CONSIDERATIONS PRIOR TO DISQUALIFICATIONProcess each disqualification with the understanding that the action can be appealed. It is very important to select the correct statutory reason and to follow the appropriate procedures for disqualification. You will need to be prepared to defend the action in court. Failure to cite the correct statute for disqualification could render the disqualification invalid. The objective is to provide accurate administration of the special assessment programs.
DISQUALIFICATION DETERMINATION
When reviewing an account over time from year to year, portions of an account may change as other portions of the same account continue to qualify, or change to a different special assessment, or may be disqualified. Look at each year and each acre of assessment individually for any changes that may have occurred.
When land is removed from special assessment, the first step in the process is to determine what is to be disqualified and the reason for the disqualification. You need to go to the statutes that apply to the land use. If a portion of a property is EFU, and a portion is non-EFU land, and a portion is forestland, then disqualify the EFU portions under the EFU statutes and the non-EFU portions under the non-EFU statutes and the forestland portions under the forest use statutes.
Types of farm use disqualifications
EFU
• No longer in farm use
• Land is removed from an EFU zone
• Non-farm dwelling (ORS 215.236)
NON-EFU
• Taxpayer request
• Land is sold or transferred to an ownership making the land exempt
• No longer in use
• No longer in use for failure to meet income requirements under ORS 308A.071
• Recording a subdivision plat
As seen above, there are a number of disqualification types, each exhibiting unique characteristics, considerations and statutory requirements. However, only one basis for disqualification depends almost exclusively upon inspection by an appraiser and that is determining a property is no longer in farm use. All other types of disqualification are determined by conditions that do not require appraiser judgment. As a result, developing consistent criteria to demonstrate that property is no longer in farm use becomes critical.
Disqualification after one full calendar year of "no longer in use."
If the farm use appears to no longer be in a qualifying use but is compatible with continuing farm use or wants to continue farm use, then the assessor may want to wait until there is a full calendar year of non-qualifying farm use before proceeding with the disqualification. In this case it is recommended to notify and communicate with the taxpayer and if the use is questionable give the taxpayer an opportunity to bring the property into compliance. Flag the file and disqualify when there is a full calendar year of non-qualifying farm use or when the assessor is convinced the farm use will no longer continue to qualify. In the event of an appeal, the assessor would then be able to demonstrate they have worked with the tax payer and can support the reason for the disqualification.
Before a property is disqualified, OAR 150-308A.113 (EFU) and 150-308A.116 (non-EFU) requires the assessor must:
• Make a reasonable effort to contact the owner, owner's agent or person using the land
• Make a site inspection of the property
• Request the recent history of the property's use
• Maintain a record of the inspection, any contact letters or other means of contact between the assessor and the taxpayer, and notations of the conditions found that indicate a lack of a qualifying farm use. This information must be maintained in the assessor's office for a minimum of three years.
TAKE QUIZ
In 1961, the Oregon Legislature began to adopt farm use special assessment laws. The Oregon Legislature, administrative rules, and Tax Court, Attorney General, and the Department of Revenue decisions have modified or clarified these special assessment laws since then. This comprehensive manual details the complexities of this program. The legislative intent can be found in Oregon Revised Statute (ORS) 308A.050 and is summarized as follows: