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Atlantic Coast Leh, LLC v. Township of Little Egg Harbor

26 N.J. Tax 151 (2011)

TAXATION; FARMLAND ASSESSMENT — Although a property may technically qualify for farmland assessment, if the dominant use of the property is not a qualifying use, it will not so qualify.

A taxpayer owner approximately 12 acres of mostly vacant land. It had a 290-foot, income-generating, cellular communications tower on less than an acre. The taxpayer also paid an out-of-state beekeeper to maintain beehives on the property. The bee farm yielded honey, wax, and other products. The beekeeper purchased the bee’s products for amounts just above the statutory minimum for farmland taxation qualification. The small amount collected for the bees’ products consistently resulted in a financial loss to the taxpayer.

The taxpayer applied for farmland assessment treatment, but the municipality’s tax assessor denied each application. The assessor ruled that either the devoted agriculture land was smaller than the required minimum or that the gross sales from the apiary products were too small to qualify. The assessor found that the principal use of the land to be that of a radio station. The taxpayer appealed and the Board of Taxation affirmed the assessor’s determinations. The taxpayer then filed a motion for summary judgment, appealing the decision that had denied its farmland assessment application. The municipality filed a cross motion for summary judgment. At issue was whether the taxpayer’s land qualified under the Farmland Assessment Act of 1964.

The Act and the New Jersey Constitution allow eligible farmland to be assessed at favorable values. Specifically, under the Act, upon application, land over 5 acres, actively devoted for agricultural/horticultural uses for at least two successive years immediately preceding the tax year at issue, is to be assessed at a value for agricultural or horticultural uses. Certain minimum revenue generating requirements from the sale of agricultural/horticultural products produced on the property must be met. The primary goals of the Act and the Constitution are to preserve “family farms” by providing “family” farmers with economic relief and to encourage preservation of open space. However, even if a property meets all of the standards under the Act, if it is also used for commercial purposes, the benefits of the statute may not apply.

The Tax Court concluded that the property did not qualify for farmland assessment. It was undisputed that the property technically satisfied all requirements of the Farmland Assessment Act. However, because the subject property was also actively devoted to a non-agriculture/horticultural use, that being the operation of an onsite cellular communications tower, the Court needed to determine if the beekeeping use was the dominant use of the property. If it was, then the property would qualify. If the dominant use of the property was a use other than an agricultural or horticultural use, the property would not be entitled to preferential farmland assessment

Ultimately, it concluded that the dominant use of the property was the cellular tower, not the beekeeping activities. According to the Court, the apiary activities were subordinate to the taxpayer’s non-agricultural exploitation of the property. The property’s history revealed a significant zoning and transactional history primarily pertaining to the intent to construct the cellular tower onsite. Even though the bees foraged the entire property, the Court concluded that the operation of the 290 foot high cellular tower dominated over the beekeeping activity with respect to its size and all of the beehives were contained within the fencing of the cellular tower. Accordingly, the Court concluded that the taxpayer failed to satisfy its burden of demonstrating its property’s entitlement to farmland assessment status.

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