Owners of at least 190 parcels of agricultural land or farm buildings failed to return a form certifying that their property is still being used for farming and have been removed from the state’s “current use” program, a tax department official told VTDigger on Thursday.
Unless the decision is overturned, the result is that these farmers will have to pay significantly higher taxes on their land.
Vermont’s current use program was created in 1978 to tax agricultural land and forests at special rates lower than the land’s market value. The program also exempts farm buildings from property taxes.
The Legislature passed Act 57 in 2015, adding a requirement that agricultural landowners enrolled in current use certify with the tax department each year that their land is still being used for farming.
Sen. Alison Clarkson, D-Windsor, who served on House Ways & Means during the session when the committee sponsored the certification, said the requirement was seen as a “pretty non-intrusive, trusting way to have people sign off on the fact that they’re doing what they say they’re doing.”
In 2015 and 2016, the tax department sent out pre-populated copies of the certification form to thousands of landowners enrolled in current use, said Tax Commissioner Kaj Samsom. The department did not remove landowners who failed to meet the new requirement during those two years, he said.
The department sent out forms again in September 2017 and informed land owners they were due back that November, said Elizabeth Hunt, an official in the property valuation division of the Tax Department. Another reminder was sent out to 1,069 parcels who had not returned the form in February 2018, due back in March, she said.
The owners of the 229 parcels who had still not returned the form were given a chance to file an appeal with the department to be reinstated in current use, she said. About 40 appeals were filed and those owners may be added back to the program.
Samson said that the remaining individuals — owners of about 190 parcels of land — have been removed for the 2019 tax year. That accounts for about 3 percent of more than 7,000 land parcels whose owners were asked for a reply. The number of landowners impacted is not significantly lower than the number of parcels, said Hunt.
One of the reasons the department needs to have a “cutoff date” is that agricultural certifications need to be collected for next year, said Samsom. “It’s time to close the books on tax year ’19.”
Samsom noted that there is no requirement in the statute that the department notify agricultural landowners of this requirement. The department worked with the Agency of Agriculture to provide additional outreach about the certification, he added.
Elise Annes, of the Vermont Land Trust, said the land trust was concerned that working farms would now be penalized simply for not sending in the form.
“As a state, we strongly value our working lands, and as you can imagine a lot of the margins are quite slim for agricultural operations,” said Annes. “So even a year of paying taxes at the full market value could be quite difficult or even crippling for an operation.”
“It seems like we should be doing all that we can to support these operations, so my concern is that not submitting a form might be doing unintended harm with that withdrawal from current use,” she added.
Annes said the land trust would like the state to consider another process for preventing perceived misuse of the current use program, such sending out certified mailings to ensure farmers had the forms “in hand.”
Clarkson called current use “the most important land conservation program we have in Vermont.”
“The whole purpose of current use is to keep our working landscape viable…and to enable people to keep that land productive and afford it,” she said.
Clarkson added that current use has benefited not just farmers and foresters, but also anyone who enjoys the scenic views of Vermont’s pastoral landscape. “New Jersey was the ‘Garden State’, do you see many gardens when you drive through New Jersey?” she said.
The Legislature’s goal with the certification requirement was to bring the “agricultural community into the same degree of oversight as those who have their land in forestry,” said Clarkson. Forest landowners have to submit management plans and have their land inspected by their county forester to remain enrolled in current use.
“It’s hard because we don’t want to put an undue burden on farmers,” said Clarkson. “On the other hand, for a program that is this important and that gets this much scrutiny, you have to make sure it has integrity.”
Samsom said he was not sure what more the department could have done to inform agricultural landowners of this requirement.
“At the end of the day,” he said, “we feel like we really went above and beyond to not catch folks by surprise.”
