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Township of Monroe v. Gasko

21 N.J. Tax 391 (App. Div. 2004)

TAXATION; FARMLAND ASSESSMENT—If farm structures are used predominantly as sales areas, they don’t serve to satisfy the requirement that a property be used as a farm to qualify for special farmland assessment benefits even though they may also be greenhouses.

A farm dealt with nursery produce. Its owner built multiple structures on the property, characterizing them as “greenhouses.” Each structure was involved in the growth and production of nursery stock, primarily seasonal flowers and plants. The structures also were used for the marketing and sale of the plants. The local tax board determined that the structures qualified for farmland assessment valuation pursuant to N.J.S.A. 54:4-23.12(a). To qualify for farmland assessment valuation, a structure must be used substantially for growing or storage of produce, and any “sales activity” must be only incidental.

On the municipality’s appeal, the Tax Court held that the structures did not qualify. It noted that the property was visible from the highway, and there were prominent displays on the property to attract customers to the structures. Furthermore, each structure was designed for easy navigation by customers, who were able to select and carry goods to retail counters. The Tax Court also found that the structures could have been taxed differently had they barred customers from entering. Thus, it concluded that even though the major functions of the structures were that of growing and storage, they were nonetheless excessively used for marketing and selling activities.

The Appellate Division affirmed the Tax Court’s decision, holding that these greenhouses, while performing a role in the growing and production of the nursery stock, were also an integral part of the marketing and sales of that stock. It held that the structures were used for sales activities that were more than merely incidental to that growing and production.

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