Changes in tax laws could affect farm lands

By Tom Hintgen (Contact) | The Daily Journal

Published Wednesday, September 10, 2008

Minnesota legislation pertaining to property taxes, signed into law this year, will affect many taxpayers in Otter Tail County. That's the word from County Assessor Bob Moe who addressed the county board of commissioners Tuesday morning.

One bill, known as the Green Acres property tax law, pertains to

nonproductive acres such as sloughs, woodland and wetlands that are not used for agricultural production. Those acres no longer will be eligible for the reduced agricultural valuation and property tax deferment provided by Green Acres.

Another program enacted in 2008 will provide honorably discharged disabled Minnesota veterans with some, if not all, of their property taxes forgiven — beginning in 2009. Qualifying veterans must have the proper paperwork filed with their county assessor's office.

"As for the Green Acres program, owners of non-productive acres that are currently receiving Green Acres benefits have two options," Moe said. "Non-productive acres currently in the program may be withdrawn from the program or they may remain until any part of the land is sold, transferred or subdivided."

Moe said that land that’s withdrawn will be subject to a payback of deferred taxes.

If owners notify the county assessor's office of their intent to withdraw some or all of the acres on or before Jan. 2, 2009, the assessor will estimate the three-year payback amount and notify the owner of that amount in the summer of 2009. The final determination to withdraw or not can be made by the property owner at that time.

If the owner decides to withdraw all or part of the land, the tax would then be payable in November 2009.

If any portion of the non-productive property currently enrolled in the Green Acres is withdrawn, sold, transferred or subdivided after Jan. 2, 2009, the non-productive land must be removed from the program.

It will then be subject to the new payback of up to seven years of deferred taxes.

County assessors such as Moe will send letters to inform landowners that are currently enrolled in Green Acres about the options available under the new legislation. The letters for affected property owners in Otter Tail County will be sent in about one week.

Veterans with 70 percent disability or higher will have up to $150,000

excluded from the annual market value of their homestead property. Those with a 100 percent permanent disability rating will receive up to $300,000

exclusion.

"I'm fully in support of tax relief for disabled veterans," county board member Dennis Mosher said Tuesday. "However, in order to meet county budgets, this difference will need to be borne by other taxpayers. We as a commission have no other choice."

County board chairman Sydney Nelson agreed.

Said Moe, "When you change how someone gets taxed, there's a shift to

someone else. Overall, with both of these programs (Green Acres and vet

disability tax relief) we don't know the specifics on how this will fully affect us here in Otter Tail County until all of the changes are entered and calculated."

A property must be the homestead of a qualified disabled veteran in order to receive this value exclusion.

To qualify, a veteran must have been honorably discharged from the United States armed forces as indicated by United States Government Form DD214 or other official military discharge papers. There also must be certification of the veteran by the United States Veterans Administration as having a service-connected disability that meets the requirements of this new law.

In the case of agricultural homesteads, only the house, garage, and

immediately surrounding one acre of land will qualify for the exclusion. If a property qualifies for this market value exclusion, the property does not receive the residential homestead market value credit provided under Minnesota Statute 273.1384, subdivision 1.