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Joseph L. Bartonek, LLC v. Edison Township

A-6898-02T3 (N.J. Super. App. Div. 2004) (Unpublished)

TAXATION; FARMLAND ASSESSMENT—Farmland tax assessment treatment accorded to properties “devoted to the production for sale” extends to properties where crops are made ready for sale, including those used for storage pending sale.

A landowner stored and cultivated nursery, floral, ornamental, and greenhouse plants on its property. Most of these plants were grown in containers or balled with burlap bags, rather than planted directly in the soil. Approximately one-half acre of landowner’s 15.4-acre lot was covered by an office, a warehouse, roadways, and parking lots. The property also contained eighteen “hoop” or “wintering” greenhouses. These consisted of lightweight metal frames covered by plastic sheeting in the winter and shade cloths in the summer. An eight-acre portion of the property contained over 700 trees. The owner engaged approximately ten employees during the winter and twenty-five during the rest of the year. Their duties included tending to the various plants on the property. The owner also owned other nurseries in the state where plants were grown. He would then transport the plants from the other facilities to the property in question. He also bought plants to grow from other farmers. When ready, most of the plants on the property were to be sold to landscapers. Homeowners bought the rest.

The owner repeatedly applied for a Farmland Assessment Act tax exemption. The exemptions were denied because the tax assessor did not believe that the owner’s operation was producing plants in “the methodology that he would call farming.” He stated that from his observations, it looked as though the owner simply brought plants to the location and sold them as quickly as possible. Accordingly, the assessor believed that the property had nothing to do with farming or producing plants. On appeal, the Tax Court held that the property qualified for the exemption. It placed great emphasis on the owner’s expert’s testimony about how nursery production now took place. The expert testified that approximately eighty percent of nursery production is done in containers. Furthermore, the expert testified that what distinguished the owner from retailers was that retailers do not keep significant amount of stock at the end of a growing season, whereas this owner maintained a large inventory that he continued to repot, water, fertilize, and grow throughout the year.

On appeal to the Appellate Division, the municipality contended that the property was not devoted to horticultural use and was not entitled to the farmland assessment because the owner did not produce the horticultural items at the site. The Farmland Assessment Act deems land to be held in horticultural use when it is devoted to the production for sale of fruits of all kinds, vegetables, nursery, floral, ornamental, and greenhouse products. The language “devoted to the production for sale” encompasses making crops ready for sale, including storage pending sale. The Court held that the nature and level of agricultural or horticultural activity necessary to qualify for farmland assessment is fact-sensitive, and therefore the Tax Court was free to accept the owner’s expert’s testimony.

The municipality also contended that the Tax Court erred because the property owner’s use failed to advance the Act’s purpose of preserving open space. However, the Court noted that the purpose of the Act is to preserve family farms by providing farmers with some measure of economic relief through taxing farmland based on its value as a continuing farm. The maintenance of open spaces and the preservation of the beauty of the countryside, while significant factors in the Act’s passage, were only incidental to its principal objective.

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