Volume 4 - Opinions of Counsel SBEA No. 12
Agricultural exemption (gross sales requirement) (rented lands) - Agriculture and Markets Law, §§ 305, 306:
A sole proprietor of otherwise qualified land leased to a corporation for purposes of farm production may apply for an agricultural value assessment where the lessee has produced an average gross sales of $10,000 or more of agricultural production over the last two years. Rental value is not to be considered when determining eligibility.
We have received an inquiry concerning the Agricultural Districts Law (Article 25AA of the Agriculture and Markets Law). A farmer who owns approximately two hundred acres of eligible farmland that produces gross sales in excess of $10,000 per year, has placed ownership of his buildings, equipment, stock and supplies into a corporate structure, but has retained ownership of the land in his own name as a sole proprietor. The land is presently leased to the corporation for purposes of farm production. The question is whether the owner as a sole proprietor is eligible for an agricultural value assessment.
The Agricultural Districts Law provides that an “owner” of not less than ten acres of land, which has been used in the preceding two years for agricultural production, and has produced, for sale, agricultural products resulting in a gross average sales value of $10,000 or more over the two preceding years, may apply for an agricultural value assessment. The land must either be located within an established agricultural district, or be subject to an eight year commitment to continued agricultural production (Agriculture and Markets Law, §§ 305, 306)
There is no requirement that the owner actually operate the eligible farmland. If the owner leases such land to another, he must satisfy the local assessor that the lessee has produced an average gross sales of $10,000 or more over the last two years. The measure is always gross sales of the agricultural production. Rental value, therefore, is not to be considered when determining eligibility under this statute. In the given factual situation, the owner will meet the $10,000 gross sales requirement, and, assuming the land meets the other eligibility requirements, he may apply for the agricultural value assessment.
August 22, 1974