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Township of Monroe v. Gasko

182 N.J. 613, 868 A.2d 1022 (2005)

TAXATION; FARMLAND ASSESSMENT—Merely allowing the public into a greenhouse to view the plants that would be ultimately purchased is not enough sales activity to disqualify a property from the favorable farmland assessment treatment that would otherwise be accorded the property.

Property owners were denied a farmland assessment for temporary greenhouses under the Farmland Assessment Act. The Act was intended to slow the trend of farmland being converted to other uses by assisting farmers who continued to use their land for farming purposes. It provides for reduced real property tax evaluations for single-use facilities, such as greenhouses, as long as the facility did not have a dedicated space for sales activities. These property owners owned several greenhouses. They sold goods from one greenhouse over a twenty-week period during each year. The other greenhouses were used exclusively for growing the flowers and plants. No sales took place in those greenhouses even though customers could enter them to look for plants and flowers. There were no price lists or advertisements in the other greenhouses, and no special accommodations were made in those greenhouses for sales. Customers were required to choose their plants and flowers and then purchase them in the one greenhouse. The municipality denied farmland treatment to all the greenhouses, finding that each greenhouse contained sales space.

The owners appealed to the Tax Court, which agreed with the municipality. The owners appealed further. The Appellate Division affirmed, holding that because the owners’ marketing and sales activities affected all of the greenhouses, not just the one where the sales actually took place, all the greenhouses were disqualified from the farmland tax exemption. A final appeal was taken to the Supreme Court and it reversed holding that the Farmland Assessment Act contemplated sales as a natural consequence of operating a farm. As long as the owners used the greenhouses for growing purposes and no adjustments were made for sales or marketing, for example by using some of the greenhouse space for sales tables and posters, the greenhouses are not regarded as sales space. The Court noted that merely allowing the public into a greenhouse to view the plants that would ultimately be purchased is not enough sales activity to exclude the owners from claiming the favorable tax treatment.

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