Routt County appraisers puzzled by recent property tax rulings
August 7, 2012
Steamboat Springs — Routt County Assessor Gary Peterson confirmed this week that recent rulings by the Board of Equalization on the eligibility of rural farm and ranch home sites for lower property taxes through agricultural tax status have created some confusion among his appraisers.
Peterson said Monday that two rulings last week, one involving a luxury ranch subdivision just south of city limits and a second involving two modest homes on a smaller parcel on Routt County Road 33 in the neighborhood of Twentymile Coal Co., are viewed by his staff as being inconsistent.
"I can see how the commissioners ruled the way they did," Peterson said. "But I have a few appraisers who found the decisions hard to reconcile."
The first ruling affirmed his office's stance that the one-acre parcels under luxury homes in Storm Mountain Ranch were not eligible for agricultural tax rates, and the second overruled his office in the case of the smaller piece of agriculture land with two modest homes off Twentymile Road southwest of Steamboat.
In many small Colorado counties, Routt among them, the county commissioners change hats to sit as the Board of Equalization in cases where property owners wish to appeal the outcome of their original appeal to the assessor regarding their tax status.
The crux of both appeals was the question of whether the owners of homes on the properties were "integral" to the agriculture operations taking place on the larger parcel.
In the case of the Ashley Investments property on C.R. 33, the assessor visited the site and determined that a modular home on the land was integral to the agriculture operation because a ranch caretaker occupied it. However, a second older home, where the assessor could see sheets over the furniture, was deemed unoccupied. As a result, he decided there was no claim to be made that it was integral to agriculture operations.
Board of Commissioners Chairman Doug Monger said Monday that all three commissioners, acting as the Board of Equalization, agreed that the owners of the second home in question on C.R. 33 are integral to the agriculture operation there because the elderly couple (both in their 90s) and their children use the home solely for visiting the ranch to ensure that the tenant farmer is taking proper care of the land.
"They came in and argued that it's where they stay when they come up here" to check on the ranch, Monger said. "It's not like a getaway cabin."
Commissioner Diane Mitsch Bush confirmed that she agreed the second home used by the owners was integral to the agriculture activities.
The commissioners denied the agriculture status appeal of the home sites at Storm Mountain Ranch. They determined that their four annual homeowners' meetings and additional conference calls to deal with subjects including the care of fencing and irrigation ditches were not sufficient to make the owners integral to the ag operations.
The Board of Equalization hearing for Storm Mountain Ranch took place July 30, and the hearing for the Ashley Investments property took place July 31. Peterson said one of his appraisers wondered out loud whether the Board of Equalization would have been able to justify denying agriculture status for Storm Mountain Ranch owners if it had ruled favorably for Ashley in advance of the Storm Mountain hearing.
Both cases turned on language in a law adopted in 2011 that requires county assessors across the state to re-evaluate properties that benefit from subsidies in the form of lower property tax rates because those properties are involved in agriculture production. The Colorado Legislature passed House Bill 1114 in an effort to restore a more equitable distribution of the overall property tax burden by withdrawing the favorable tax rates, only from the one acre of land a rural home sits on where the occupants of that home are not directly involved in farming and ranching. The difference in tax bills that comes as a result of the changes in status varies with the value of comparable land sales in the neighborhood.
At Storm Mountain Ranch, all of the one-acre building sites, which sit on larger 35-acre parcels within the 1,080-acre ranch, uniformly received new valuations of $1.43 million, up from a prior range of several thousands of dollars when they enjoyed agriculture tax status.
At the 390.76-acre Ashley parcel, last year's tax bill for the land was $92, Peterson said. Had the assessor’s decision not been overturned by the Board of Equalization, the value of the one-acre second home site would have been raised to $26,000, and the property would have seen a modest increase in taxes.
Because the caretaker-occupied home is integral to agriculture operations, its one-acre site remains at the low agriculture tax rate.
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com