Ag Assessment & Farm Taxes

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Agricultural Assessment

The “agricultural assessment” that you receive through your local property tax assessment office can reduce your property taxes. Land that is being actively farmed – used as pasture, mown for hay, tilled for crops, or even put into Christmas tree production – should be assessed based on its agricultural value, rather than its full market value.

Agricultural assessment is available in every community in Ontario County and across New York, provided that the land is eligible. For your land to qualify for agricultural assessment:

1. The farmed land must be a minimum of 7 acres
2. Land must be used for crops, hay, commercial boarding of horses or livestock production
3. The farm operation must earn at least $10,000 in farm sales per year. (Parcels smaller than 7 acres may qualify if the farm has gross sales over $50,000)

Beyond the farm land, your woodlot, hedgerows, and other support land (up to 50 acres per eligible tax parcel) may qualify. Qualifying farm land should be in a certified Agriculture District, but it does not have to be for agriculture assessment.

If you are renting your land to a farmer, your land may be eligible to receive agricultural assessment if the property satisfies acreage requirements, the farmer earns the minimum in sales, and you have a long-term lease (5+ years) with the farmer.

Contact the Town Assessor in your Town and let them know you want to apply for agriculture assessment. Below are some forms you will need:

• Application & instructions for Agriculture Assessment (RP-305, 10 pages)
• Agriculture Assessment Renewal – due by March 1 each year to stay in the program

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Sales Tax Exemption

If you are growing crops or livestock FOR SALE (or you are boarding horses commercially), you meet the minimum eligibility to have your farm purchases exempted from sales tax.

There is no income minimum and the exemption takes place at the time and place of sale – not filed afterwards.

New York State Department of Taxation provides an easy-to-use form and clear instructions. Download, print, and fill out Form ST-125 (below) to use each time you make a purchase for the farm, or file a blanket form with the retailer.

Your commercial farm must stand up to scrutiny if you are challenged as to whether or not you qualify for the sales tax exemption.

TIP: Make sure you have a bank account for the farm that is separate from your family checkbook. Keep detailed and well-organized farm production records, even for very small farm operations. Claim farm income on Schedule F when you file income tax documents. These will all legitimize the fact you are using the sales tax exemption for farms appropriately.

• ST-125 Farmer's and Commercial Horse Boarding Operator's Exemption Certificate

Last updated July 26, 2019