Agricultural Exemption

WHAT IS THE AGRICULTURAL PROGRAM AND HOW DO I APPLY?

Reference Idaho Codes 63-604 and 63-208. The Idaho Code describes agricultural land as land actively devoted to agriculture and a part of a bona fide profit-making agricultural venture.
The land is further described as land:

    Used to produce field crops, including, but not limited to, grains, feed crops, fruits, and vegetables; or
      Used by the owner or bona fide lessee for grazing of livestock to be sold as part of a net profit-making enterprise or in a cropland retirement or rotation program.
        Land shall not be classified or valued as agricultural land which is part of a platted subdivision with stated restrictions prohibiting its use for agricultural purposes.
          Land utilized for grazing of a horse or other animals kept primarily for personal use or pleasure rather than as part of a bona fide profit-making agricultural enterprise shall not be considered to be land actively devoted to agriculture.

The intent of the program is to encourage landowners to use their land to produce a marketable product for public consumption. For example, an owner may produce fruits and nuts from trees or graze their cattle on the grass or hay growing on the land. If the land must lie fallow for a period of time to improve future growth of crops or grazing ground and is in a government-sponsored program for this purpose, this land may be included even though it may not be producing a marketable product at the current time.

Please contact the Timber/Agricultural Department of the Assessor's office if you need more information about agricultural products, qualifications for grazing horses and other animals, or crop retirement programs.

ACREAGE REQUIREMENTS

    If the total area of such land, including the home site, is more than five contiguous acres (may be a group of separately assessed parcels with common boundaries), the owner may make initial application for the program. To continue the agricultural classification in future years, the owner must then ensure that the land continues to be devoted to agricultural use or show that it has been placed or continues to be in a crop retirement or rotation program.
      If the total area of such land is five acres or less, the owner may make initial application and must show that the land was actively devoted to agriculture during the last three growing seasons and:
        Agriculturally produces for sale or home consumption the equivalent of 15% or more of the owners' or lessees' annual gross income; or
          Agriculturally produced gross revenues in the immediately preceding year of $1000 or more, including net income per sale of livestock. When the area is five acres or less, such land shall be presumed to be non-agricultural land until established that these requirements have been met.
            The landowner must provide proof of these minimum incomes each year for the land to remain in qualification.

APPLICATION DEADLINE

Parcels larger than five acres: If the initial application is not received in the Assessor's office by March 15 of the year in which the owner is seeking the agricultural classification, it will be assumed that the land does not meet qualifications. For land that is five (5.0) acres or less in size: The landowner must submit the initial application and provide proof of income (from the year before) by March 15. Proof of minimum income must be provided by March 15 each year thereafter.

VALUATION OF AGRICULTURAL LAND

When property is accepted into the agricultural program, it is classified as dry cropland, irrigated cropland, dry grazing, or irrigated grazing. There are a number of different assessment rates that apply to the land according to its ability to produce crops or grazing grasses. The value is calculated by multiplying the acres in the program by one of these rates, which are lower than the per acre rates for full market value, to obtain the taxable value.
These rates are based on the income approach (potential income from the land), are provided by the State Tax Commission, and change each year. This program does not provide a true exemption but a reclassification according to the land's agricultural use. For more information about assessment rates, contact the Timber and Ag Department.

LENGTH OF PROGRAM

The land remains in the program for as long as a landowner actively manages it as agricultural land, whether or not it produces crops or is in rotation. When land is removed from this program, it is then assessed at full market value. The landowner is not required to pay back taxes on the difference in value between full market value and the lower taxable values placed on the land while it was in the program.

YIELD TAX

If the grazing ground is timbered or there are small areas of timbered ground included in the acres classified as cropland, the landowner will be required to pay a 3% yield tax on timber harvested and delivered to a mill. The agricultural rates per acre do not account for potential income from the trees. The total taxable value depends upon the species of trees and the quantity harvested (by the thousand board feet).

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