Colorado

Property Classification:

Property is classified by statute for assessment purposes into ten legal classes. A single assessment ratio is specified for all of these classes, with the exception of residential property whose ratio is set by the legislature. Specifically, all taxable property is assessed at 29% of its actual value, with the exception of residential real property.

Forest land that meets specified requirements is classified as agricultural property and is valued accordingly.

Colorado Statutes define agricultural land as one of the following (C.R.S. 39-1-102):

1) A parcel of land, whether located in an incorporated or unincorporated area and despite the uses for which such land is zoned, that was used the previous two years and presently is used as a farm or a ranch, or is being restored through conservation practices. The conservation practice must be a plan under the Conservation Reserve Program (CRP) or a plan approved by an appropriate conservation district. Agricultural land includes land under the residence and land under support buildings if they are a part of the operation.

2) A parcel of land that has at least forty acres of forestland and that is subject to a forest management plan. The land must be used to produce tangible wood products that originate from the productivity of the land for the primary purpose of obtaining a monetary profit.

3) A parcel of land that consists of at least eighty acres, or less than eighty acres if such parcel does not contain any residential improvements, is subject to a perpetual conservation easement, was classified by the assessor as agricultural land at the time such easement was granted, if the grant of the easement was to a qualified organization, if the easement was granted exclusively for conservation purposes, and if all current and contemplated future uses of the land are described in the conservation easement. "Agricultural land does not include any portion of such land that is actually used for nonagricultural commercial or residential purposes."

4) A parcel of land, used as a farm or ranch, if the owner has a decreed water right or a final permit to appropriated ground water for purposes other than residential purposes, and the water appropriated under such right or permit is used for the production of agricultural or livestock products on the land. This provision does not fall under the two-year use requirement as described in 1).

5) A parcel of land that was reclassified from agricultural to another classification and met one of the foregoing requirements during the three years before the year of assessment. The land need not have been classified or eligible for classification as agricultural during the 10 years preceding the year of assessment.

Forest land - means land of which at least 10% percent is stocked by forest trees of any size and includes land that formerly had such tree cover and that will be naturally or artificially regenerated. "Forest land" includes roadside, streamside, and shelterbelt strips of timber which have a crown width of at least one hundred twenty feet. "Forest land" includes unimproved roads and trails, streams, and clearings which are less than one hundred twenty feet wide.

Conservation Property - Certain land that is subject to a perpetual conservation easement constitutes agricultural land. The parcel of land must be at least eighty acres, or of less than eighty acres if such parcel does not contain any residential improvements, and that is subject to a perpetual conservation easement, if such land was classified by the assessor as agricultural land at the time such easement was granted, if the grant of the easement was to a qualified organization, if the easement was granted exclusively for conservation purposes, and if all current and contemplated future uses of the land are described in the conservation easement. "Agricultural land" under this subparagraph does not include any portion of such land that is actually used for nonagricultural commercial or residential purposes.

Valuation of Forest land:

All forest lands eligible for agricultural land designation will be determined by the Colorado State Forest Service during annual inspections. The property must be described and appear on the report submitted to the assessor, for each assessment year, by the Colorado State Forest Service on March 1 to qualify as agricultural land.

Forestland that has been designated as agricultural is classified and valued the same way as comparable surrounding agricultural land. If there is no agricultural land surrounding a forestland parcel, the soil classification from the published soil survey for the parcel is determined and valued according to similar soil types.

The "actual value" of agricultural lands, exclusive of building improvements thereon, shall be determined by consideration of the earning or productive capacity of such lands during a reasonable period of time, capitalized at a rate of (13%) thirteen percent. (Sec. 39-1-103(5)(a) C.R.S.)

Once the "actual value" is determined the assessment rate of 29% (currently) is applied to arrive at the tax-payers liability.

Land Under a Perpetual Conservation Easement

Agricultural land that becomes subject to a perpetual conservation easement shall continue to be valued as agricultural land, except that if any portion is used for nonagricultural commercial, residential, or any other purposes not permitted by the easement, that portion shall be valued according to such use.

Other Agricultural Property

Agricultural property (agribusiness) that does not meet the definition of farm, ranch, or forestland is valued according to its use on the assessment date. The market approach is generally used to determine the value. The approach uses sales of similar properties to arrive at the estimate of value. Other agricultural property may include (but is not limited to) feedlots, green houses, fur-bearing animal farms, and mushroom farms.

Colorado does not have a severance tax on timber.

• Colorado State Forest Service. Forest Ag encouraging forest productivity for qualified landowners with 40 or more forested acres. CSFS #150-599. Fort Collins, Colorado.

• Colorado Division of Property Taxation of the Department of Local Affairs. 2020. Classification and valuation of agricultural property in Colorado. 15-DPT-AR PUB B5 (01/20)

• Colorado Division of Property Taxation of the Department of Local Affairs. 2020. ARL VOL 3 15-AS-DPT 1-89 Rev 1-20