Florida

Property Classification:

For property tax purposes each year the county assessor classifies all lands within the county as either agricultural or nonagricultural (F.S.193.461).

Only lands which are used primarily for bona fide agricultural purposes shall be classified agricultural. "Bona fide agricultural purposes" means good faith commercial agricultural use of the land. If classified as agricultural the land will be assessed solely on the basis of character or use. (This is commonly referred to as the "Greenbelt Law")

Agricultural purposes - includes, but is not limited to, horticulture; floriculture; viticulture; forestry; dairy; livestock; poultry; bee; pisciculture, when the land is used principally for the production of tropical fish; aquaculture; sod farming; and all forms of farm products and farm production

In determining whether the use of the land for agricultural purposes is bona fide, the following factors may be taken into consideration:

1. The length of time the land has been so utilized;

2. Whether the use has been continuous;

3. The purchase price paid;

4. Size, as it relates to specific agricultural use;

5. Whether an indicated effort has been made to care sufficiently and adequately for the land in accordance with accepted commercial agricultural practices, including, without limitation, fertilizing, liming, tilling, mowing, reforesting, and other accepted agricultural practices;

6. Whether such land is under lease and, if so, the effective length, terms, and conditions of the lease; and

7. Such other factors as may from time to time become applicable.

For classification purposes the forests are either pine or non-pine forests. Pine forests can be planted or natural. Non-pine forests can be mixed, swamp, bottomland hardwood, or non-productive lands.

Application:

NOTE: Effective January 1, 2003 annual renewal is required.

No lands shall be classified as agricultural lands unless a return is filed on or before March 1 of each year. The property appraiser, before classifying such lands, may require the taxpayer or his representative to furnish the property appraiser such information as may reasonably be required to establish that such lands were actually used for a bona fide agricultural purpose. Failure to make timely application by March 1 shall constitute a waiver for 1 year of the privilege granted for agricultural assessment.

However, an applicant who is qualified to receive an agricultural classification who fails to file an application by March 1 may file an application for the classification and may file a petition with the value adjustment board requesting that the classification be granted. The petition may be filed at any time during the taxable year on or before the 25th day following the mailing of the notice by the property appraiser.

When property receiving an agricultural classification contains a residence under the same ownership, the portion of the property consisting of the residence and curtilage must be assessed separately.

Change in use - The property appraiser shall reclassify the following lands as nonagricultural:

1. Land diverted from an agricultural to a nonagricultural use.

2. Land no longer being utilized for agricultural purposes.

Valuation and Assessment:

Agricultural and forestry land, under the "Greenbelt" law, is valued based on its current use. Forestland's value is based on the average annual growth potential from seedling to economically mature timber, also known as "annual equivalent basis". It is what the landowner would be making if a timber crop could be sold on an annual basis rather than once every 20-30 years. Using this approach one calculates the current value of the "income stream" the property is expected to generate. This assessment is based on the present value of a future income or the site's "productive value." The more productive lands are assessed higher than less productive lands.

The valuation method is a modified 'sustained yield' method in that annual increment of value represented by growth is recognized and converted into a dollar value (F.A.C. Rule 12D-51.001). Expenditures for management and protection are deducted and the resulting annual net income is capitalized. The income stream is the financial returns minus the management and other costs. To determine financial returns one needs the following information; site index, timber yields, stumpage prices, management, and other costs. The county appraiser is responsible for determining these values.

Current Use Value = ((yield x price) - costs)/(capitalization rate)

Once the current use value is calculated it is multiplied by the local millage rate to determine tax liability.

The higher the site index the better the soil is for growing timber. Since the assessment is based on productivity and potential income, the higher the site index, the higher will be the assessed value.

Yield is the volume of wood produced. It depends on planting rate, site productivity, and survival. Yields are derived on an annual basis (total yield divided by rotation age). Tables with the site index provide annual growth increments in cords per acre per year. Yield tables are different for natural pine, planted pine, and hardwoods. Also, rotation ages are different for different species.

Stumpage is the price paid to the landowner for the value of the tree as it stands in the forest. This price must be multiplied by the volume (yield) in the value equation.

There are two types of management costs in forest land appraisals: site improvements and annual recurring costs. Improvements are site preparation and planting. Annual recurring costs include management, overhead, and maintenance costs to prevent insect or disease outbreaks, fire, or natural disasters. Also included are any other costs directly associated with the operation of forest lands to achieve maximum productivity.

The capitalization rate is based on an interest rate for agricultural real estate loans. The overall capitalization rate is the summation of mortgage, equity and the local millage rate.

The state of Florida does not have a severance or yield tax on timber or timber products.

• F.A.C. Rule 12D-51.001

• Forida Forestry Association. 2008. Silvicultural Greenbelt Guidelines.