Few have protested Routt County agricultural tax status change
May 29, 2012
Nov. 8, 2011: Our View: Home on the range
Oct. 28, 2011: New agricultural tax law changes Routt County landscape
Steamboat Springs — With three days remaining before the June 1 deadline, fewer than 100 of the 647 rural Routt County property owners who stand to lose their agricultural status for the one acre their homes sit on already have appealed to the Routt County Assessor's Office.
"My office has not seen the backlash we were expecting," Assessor Gary Peterson told the Routt County Board of Commissioners on Tuesday. "We thought we'd see a lot more angry farmers and ranchers and nonfarmers and ranchers who were unhappy with this bill."
Peterson was referring to House Bill 1146, which was passed by the Colorado Legislature in 2011 and became law Jan. 1. The new law represents an effort to rebalance the state's overall tax burden and make it more fair to all taxpayers by removing the favored agricultural tax status for the one acre that a rural home sits on when its owners are not "integral" to the surrounding agricultural operation.
In cases where the occupants of the home consistently work the land, the new law would not apply.
Peterson told the commissioners tentatively that the highest tax liability for a Routt County property owner would be $4,718 for a large lot in the luxury Storm Mountain Ranch neighborhood and the lowest would be $82 in the outlying areas of the county beyond the 10-mile diameter Steamboat zone.
The new law required the Assessor's Office to evaluate 1,385 improved parcels with homes on them that enjoy agricultural tax status and determine whether the occupants were involved in farming or ranching.
The law was conceived to tighten up longstanding tax policy that allowed rural residents living on acreage to avoid higher residential tax rates by contracting with farmers and ranchers to work a portion of their land.
Historically, agricultural land has been valued at lower ratios in Colorado for tax purposes. Some rural residents who own modest or grand homes have been able to use agricultural tax status to reduce the taxes they pay even when they are not farmers or ranchers.
The new law continues to extend the agricultural tax subsidy to rural subdivisions and homeowners where open areas are leased to farmers. However, it does not leave what amounts to a tax subsidy in place on the lots their homes sit on unless they can demonstrate that the occupants of the home are "integral" to the agricultural operation.
The result of the revaluation of the affected 647 building lots would add about $7.5 million of assessed valuation to the county, a small fraction of the county's $1.46 billion valuation.
A building site valued at $1.65 million for taxes generated the highest tax liability of $4,718 in Storm Mountain Ranch. The average building site valuation in the Steamboat zone, for purposes of revaluation of agricultural land, was $255,785, and the median was $160,250.
Outside the 10-mile Steamboat zone, the highest site value applied was $85,670 for a rural home lot near Steamboat Lake with a tax liability of $357. The average building site value applied in the outlying areas of the county was $51,800, and the median was $42,500.
The basic criterion to sort the properties was to take note of whether the owner lived out of state, leading to a presumption that they were not integral to agriculture. Of the 1,385 total, 647 properties were deemed to be subject to the new law. The Assessor's Office used surveys to add detail to assumptions.
The process was complicated by the need to revalue the properties in time to send out adjusted 2012 tax bills for the affected properties in January 2013. Peterson noted there were very few land sales in 2011 to be used as comparables and that the tax levy won't be known until December 2012, so estimates are being drawn from 2011 taxes.
Another side of H.B. 1146 is the concerns of local longtime farmers and ranchers who depend on their grazing and hay harvesting arrangements with rural subdivisions to keep their own operations viable.
Steamboat attorney and rural property owner Rich Tremaine said the Community Agriculture Alliance was seeking the cooperation of the Assessor's Office in tracking the number of rural property owners who give up agricultural status after finding the incentive no longer warrants the trouble.
Board of Commissioners Chairman Doug Monger, a rancher, said that although the new law will result in modest tax increases for some rural property owners, it will spell relief for others.
"What it will do is lessen the burden for every other taxpayer," Monger said.
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com