Volume 9 - Opinions of Counsel SBEA No. 62
Farm structures and buildings exemption (acreage requirement) (land under buildings) - Real Property Tax Law, § 483:
If a building is otherwise eligible for the agricultural structures and buildings exemption (RPTL, §483), the land under the building may be considered in determining whether the parcel satisfies the acreage requirement of the exemption. However, if a building is of a type which may not receive the exemption, the land thereunder may not be so considered.
We have received an inquiry concerning the farm structures and buildings exemption (Real Property Tax Law, §483). The property in question consists of approximately five acres of land, a portion of which is cultivated. On the land is situated a florist and greenhouse business, as well as a residence. The question is whether the land underlying these buildings may be considered in computing the five acre requirement.
Section 483 provides a ten-year exemption to structures and buildings essential to the operation of lands “actively devoted to agricultural or horticultural use” (§483(1)). The quoted phrase is defined in subdivision 4 as “lands not less than five acres in area actually used in bona fide agricultural or horticultural production and operation carried on for profit.” Clearly, then, if the parcel’s total acreage is less than five acres, no building thereon will qualify under section 483. But if the total acreage equals or barely exceeds five acres, and if the exclusion of the land under the buildings would reduce the acreage to less than five acres, statutory interpretation is necessary.
We begin our analysis with the usual interpretative rule that tax exemption statutes, such as section 483, are to be strictly construed (City of Lakawanna v. State Board of Equalization and Assessment, 16 N.Y.2d 222, 212 N.E.2d 42, 264 N.Y.S.2d 528 (1965)), but not so strictly as to defeat the Legislature’s intent in enacting the law (Association of the Bar of the City of New York v. Lewisohn, 34 N.Y.2d 143, 313 N.E.2d 30, 356 N.Y.S.2d 555 (1974)).
Significantly, section 483 draws a distinction between different types of farm buildings. Even where the five acre requirement is satisfied, those structures and buildings (or portions thereof) used for processing agricultural and horticultural commodities or their retail merchandising do not qualify. The same is true for structures and buildings occupied as a residence by the applicant and his or her immediate family (RPTL, §483(3)). Thus, in the situation presented, even if a part of the property qualifies for the exemption, the farmer’s residence and any building or part thereof used for retail sale of flowers will not qualify.
Also relevant, we believe, are definitions contained in Rules promulgated by the State Board of Equalization and Assessment relating to the Agricultural Districts Law (Agriculture and Markets Law, Article 25AA; 9 NYCRR 194). Specifically, the phrase “land used in agricultural production” is defined as including “support land, but not nonagricultural land” (9 NYCRR 194.1(i)). The term “support land” includes “land under farm buildings” (194.1(z)), while “non-agricultural land” is defined as including “a homestead” and “retail establishments of any kind including...roadside stands used for merchandising crops” and “facilities...used to process crops” (194.1(j)).
Because of the obvious relationship between the farm structures and buildings exemption and the preferential assessment authorized by the Agricultural Districts Law, we think it reasonable to consider the criteria of the latter in interpreting the former, in the absence of any specific statute to the contrary. Accordingly, we conclude that the land under buildings which qualify for an agricultural structures and buildings exemption may be included in calculating the five acre requirement, but land under non-qualifying buildings (e.g., farm residence, retail stores) may not.
February 6, 1991