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Bailey v. Franklin Township

A-6732-04T1 (N.J. Super. App. Div. 2007) (Unpublished)

TAXATION; FARMLAND ASSESSMENTS — To properly be entitled to farmland assessment status, real property must be at least five acres that is dominantly used for an agricultural and horticultural purpose and the first five acres must generate income of at least $500 per acre and $5 per acre for the remaining land.

A county Board of Taxation granted farmland assessment status under the New Jersey Farmland Assessment Act of 1964 to real property. Adjoining neighbors challenged that assessment in Tax Court after the board denied their challenge. The Tax Court found that all the property, other than two outbuildings and approximately 18,000 square feet of land under the buildings that were not actively devoted to agricultural use, merited farmland assessment status, and granted summary judgment to the landowner.

The adjoining owners had complained that their neighbor improperly received the benefit of a farmland assessment. The subject property contained 37 acres, in which the chief operator was a nursery involved in residential and commercial landscaping design and installation, professional grounds maintenance, and retail sales. Many of the operations were offsite; however, the Tax Court found that the property in question was used to receive nursery stock. Of the 37 acres, 20 were used for growing trees and shrubs. The owner testified that the farm sold approximately 200 trees annually at a cost of between $125 to $1,250 each.

The Tax Court concluded that at least 20 acres of the property were used for growing trees and shrubs, that the income produced from the property exceeded $20,000, and that the activities on the land was appropriate under the Farmland Assessment Act.

On appeal, the Appellate Division noted that in order to properly be entitled to farmland assessment status, a property must consist of at least five acres of land dominantly used for an agricultural and horticultural purpose. This property also must earn $500 per year for the first five acres and $5 per acre for the remaining acres. The Court agreed with the Tax Court that the evidence satisfied these requirements for farmland assessment status. It held that the sale of plants is considered an agricultural use of land and land is deemed in horticultural use when it is used to generate nursery products. Accordingly, the Appellate Division affirmed the Tax Court’s judgment.

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