Volume 10 - Opinions of Counsel SBRPS No. 42
Farm silos, feed grain storage bins, commodity sheds, bulk milk tanks and coolers, and manure storage and handling facilities exemption (generally) (operating farm) - Real Property Tax Law, § 483-a:
To qualify for exemption pursuant to section 483-a of the Real Property Tax Law, a silo need not be located on an operating farm or be in current use. Similarly, the fact that no livestock is a part of a particular farm operation is immaterial to the question of whether the structures listed in such section qualify for the exemption.
Our interpretation has been requested of section 483-a of the Real Property Tax Law, which provides an exemption from taxation, special ad valorem levies, and special assessments for farm silos, feed grain storage bins, commodity sheds, bulk milk tanks and coolers, and manure storage and handling facilities. Specifically, we are asked to clarify which farm silos and commodity sheds are eligible for exemption.
In 1993 (c.527), the State Legislature amended subdivision 12(b) of section 102 of the RPTL to exclude from the definition of real property “silos located on an operating farm used to store livestock feed.” Excluding such structures from the definition of real property meant, of course, that those structures would no longer be subject to the real property tax. Moreover, these structures should have been removed from the assessor’s inventory of real property in the assessing unit and their value removed from the next assessment roll.
The exclusion proved confusing, however, as these silos still tended to be included in the inventory of farm sales. Also causing confusion was the fact that only silos being used on an operating farm should have been removed from the assessor’s inventory and from the assessment roll, because only those silos were excluded from the definition of real property. As a result, the statutory change was inconsistently applied across the State.
Therefore, in 1994, the State Legislature once again addressed the issue of the taxability of farm silos. Chapter 387 of the Laws of 1994 removed the exclusion from the definition of real property for silos located on an operating farm (i.e., again making them subject to the common law tests of real vs. personal property (Metromedia, Inc. v. Tax Commission, 60 N.Y.2d 85, 455 N.E.2d 1252, 468 N.Y.S.2d 457 (1983))). At the same time, on-farm bulk milk tanks or coolers, which had been excluded from the definition of real property since 1957 (c.915), were also removed from the exclusion in subdivision 12(b) of section 102.
In addition, however, chapter 387 added the aforementioned section 483-a to the RPTL to provide an exemption from taxation, special ad valorem levies, and special assessments for silos, bulk milk tanks and coolers, and manure storage and handling facilities. {1} The following year, “farm feed grain storage bins” and “commodity sheds” (as those terms are defined in § 483-a(3)) were added to the exemption (L.1995, c.449).
With these statutory changes, the farm items listed in section 483-a will, in most instances, fall within the definition of real property set forth in RPTL, section 102(12). If so classified, such structures should be included on the real property inventory for the assessing unit maintained by the assessor (RPTL, § 500(1); 9 NYCRR 190-1.2). If the structure satisfies the eligibility requirements of RPTL, section 483-a, however, and its owner timely files an application for exemption, such structure will be exempt from taxation, special ad valorem levies, and special assessments. This exemption must, of course, be noted on the assessment roll.
In addition to the real or personal property status of silos, the 1993 and 1994 laws differ in another respect. The 1993 law provided that only “silos located on an operating farm used to store livestock feed” were excluded from the definition of real property. As amended in 1994, however, silos (along with bulk milk tanks and coolers, and manure storage and handling facilities), though again real property, may be eligible for exemption, and section 483-a merely states that “[s]tructures permanently affixed to agricultural land for the purpose of preserving and storing forage in edible condition” shall be exempt. That is, to qualify for this exemption, a silo need not be located on an operating farm or even be in current use. Unlike the former exclusion from the definition of real property, the focus is upon the purpose for which the silo was constructed and not upon whether it is currently being used for such purpose. This change, of course, excuses assessors from having to inspect silos to determine their use. So long as the structure in question satisfies the statutory description, its owner may apply for and receive an exemption which will continue as long as the structure remains on the land.
Also, the fact that no livestock is a part of a particular farm operation is immaterial to the question of whether these structures qualify for the exemption. Although it may typically be expected that the grains stored in a farm feed grain storage bin or a commodity shed will be used to feed livestock on the farm upon which such structures are located, section 483-a imposes no such requirement as a prerequisite to such structures being eligible for the exemption.
Of course, the determination of taxable status of all real property is the responsibility of the local assessor, subject to the property owner’s right to administrative and judicial review. A building may not qualify for an exemption under section 483-a because, for example, a structure that is a commodity shed has a limited use designed specifically for the storage of grains, feed grains and other feed components. {2}
January 23, 1995
Revised December 11, 1995
{1} Manure storage and handling facilities were not specifically addressed in statute until the adoption of chapter 387.
{2} If a particular structure falls outside this defined group of exempt properties, it may still be eligible for an exemption, pursuant to RPTL, section 483, which grants a 10-year exemption from taxation to buildings or structures essential to the operation of agricultural or horticultural land, provided an application for such exemption is submitted within one year of the completion of the construction or reconstruction of such a building.
