During the contentious last legislative session, controversial bills to amend Greenacres and protect horses and equestrian use of property as agricultural received scrutiny, especially in the State Senate. At issue with respect to equestrian property was the sudden and surprising change for many equine property owners--especially in Washington County--that the County Assessor had decided to disqualify their property from agricultural classification, which has a favorable base tax rate of 0.5% of market value. Classifications that changed from agricultural to residential or rural/vacant land effectively doubled the tax rate to 1.0% of market value, and a change to commercial-industrial classification tripled the base tax rate to 1.5%. Many taxpayers saw their taxes raised suddenly and quite unexpectedly by thousands of dollars, simply because the assessor chose to view their equestrian use of the land as something other than agricultural.
I wrote language for bills that were introduced that would have strengthened the state law that gives horse boarding agricultural classification, but the measure failed to pass. On the question of equestrian property taxes and classification, a compromise measure was enacted which compels the Department of Revenue, in consultation with the Department of Agriculture, to complete a study of the ways "horse breeding and horse boarding properties" are classified under current law and make recommendations for "needed or useful law changes" to state legislative leaders by February 1, 2010.
In the meantime, equine property taxpayers whose property use has not changed but whose classification was changed from agricultural to a classification with a higher tax bracket may appeal by sending a letter to the Commissioner of Revenue no later than September 1, 2009. The Commissioner's response letter, which must be sent by December 31, 2009, is appealable to Minnesota Tax Court.
It's possible, however, that many taxpayers haven't looked closely at their 2009 Notices of Property Tax Classification and Assessment to notice whether their classification has changed or not. If they don't take action before Truth in Taxation notices go out in November--when steep increases in calculated 2009 property taxes due by April 30, 2010 will surely get people's attention--it will be too late to appeal to the Commissioner.
Are you affected? Be sure to check your January 2009 Notice of Property Tax Classification and Valuation. If your use of your horse property hasn't changed but your previously agricultural classification has, then you should consider appealing directly to the Commissioner of Revenue. Feel free to call me to talk about your individual situation.
The new law is published online at the Legislature's web site, in 2009 Session Laws, Chapter 88, Section 47.