Utah

Property Classification:

Utah does not have any specific property tax provisions dealing with forests and open space lands. However, forest land can be classified under the "Farmland Assessment Act" in which case the lands assessed value is based on the land's productive or income-producing capability (use value) instead of its market value.

For purposes of the Farmland Assessment Act (FAA) land in "agricultural use" means:

(1) land devoted to the raising of useful plants and animals with a reasonable expectation of profit, including: forages and sod crops; grains and feed crops; livestock; trees and fruits; or vegetables, nursery, floral, and ornamental stock; or

(2) land devoted to and meeting the requirements and qualifications for payments or other compensation under a crop-land retirement program with an agency of the state or federal government.

Qualifications for agricultural use valuation

Land may be assessed based on the value which the land has for agricultural use if the land:

(a) is not less than 5 contiguous acres in area,

(b) is actively devoted to agricultural use; and

(c) has been actively devoted to agricultural use for at least two successive years immediately preceding the tax year in issue.

"Actively devoted to agricultural use" means that the land produces in excess of 50% of the average agricultural production per acre for the given type of land and the given county or area.

Assessment of agricultural land under the FAA applies to the land only and not the improvements such as barns, sheds, silos, and other farm outbuildings. Improvements must be appraised separately at market value. Land beneath farm buildings and other agricultural improvements qualifies for FAA assessment when used in connection with the agricultural operation. Land under the farmhouse should be appraised at market value and should not be included in the amount of land needed to meet the acreage requirement.

Whether agricultural use is the primary or secondary use of a parcel is not determinative of FAA eligibility. As long as other uses do not hinder or exclude the agricultural use, a parcel may receive FAA assessment. (See Salt Lake Co. vs Kennecott Corporation, 1989, No. 870368)

Land less than five acres - A parcel of land smaller than five acres may qualify for FAA if 80 percent or more of the owner's or lessee's income is derived from the sale of agricultural products produced on this property or if the land is used in conjunction with other eligible land under the same ownership.

Application - The owner of land eligible for valuation under the FAA must submit an application to the assessor of the county in which the land is located to receive such assessment. If there is not a current FAA application on file in the assessor's office, a parcel shall not receive FAA assessment.

Rollback tax - If land is or has been in agricultural use, and is or has been valued, assessed, and taxed under the FAA and the use is changed or for any other reason the property is withdrawn from FAA, the owner becomes subject to the rollback tax.

The amount of the rollback tax is determined by computing the difference between the tax paid while the land was assessed under FAA, and the amount of taxes that would have been paid if the land had received a market-based assessment. The rollback tax is charged when the land has been assessed at any time during the past five years under the FAA. The rollback tax is limited to five years but is not limited to the number of years the current owner has owned the land.

Conservation Easement Exception - A property can receive an exception from the rollback tax if the property qualifies as a conservation easement. To qualify for a conservation easement, the property must:

Have been assessed and taxed under the Farmland Assessment Act.

Before January 1, of the tax year, have a conservation easement deeded to a governmental entity or charitable (IRS 501 (c)(3)) organization.

Be deeded to the qualifying organization in perpetuity. This requirement is necessary for the property to meet the IRS qualification that the contribution be exclusively for conservation.

Change of Ownership - Change of ownership does not automatically trigger a rollback tax. If the land remains in an agricultural use, the new owner files and application, and the other requirements are met no rollback tax is assessed.

Valuation and Assessment:

Various components are considered in determining the use value of the land. Agricultural land is first grouped into land classifications, according to its capability to produce crops or forage. Productive values are established by the Utah State Tax Commission with assistance of a five- member Farmland Assessment Advisory Committee and Utah State University. These factors are expressed in terms of value per acre for specific land classifications.

Land is classified according to its capability of producing crops or forage. Capability is dependent upon soil type, topography, availability of irrigation water, growing season, and other factors. The County Assessor classifies all agricultural land in the county based on SCS Soil Surveys and guidelines provided by the Tax Commission. The general classifications of agricultural land are irrigated, dryland, grazing land, orchard, and meadow. If you disagree with your land classification, you can appeal to your county board of equalization for re-classification.

The State Farmland Evaluation Advisory Committee reviews the several classifications of land in agricultural use and recommends a range of values for each of the classifications, on the basis of productive capabilities of the land when devoted to agricultural use. The recommendations are submitted to the State Tax Commission prior to October 2 of each year.

Each year the Property Tax Division shall update and publish schedules to determine the taxable value for land subject to the Farmland Assessment Act on a per acre basis. The most recent values can be found at their website: https://propertytax.utah.gov/real/faa/taxable-values.

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

Utah State Tax Commission Property Tax Division. Farmland Assessment. https://propertytax.utah.gov/real/faa

Utah State Tax Commission Property Tax Division. Where do the FAA values come from? https://propertytax.utah.gov/faa/faa-values.pdf

Utah State Tax Commission Property Tax Division. 2020. Farmland Assessment Act Standards of Practice.