NC Farm Act expands what qualifies as farming activity
Published 8:59 pm Monday, September 18, 2017
COLUMBUS – More Polk County farms may be able to qualify to enter the present use value program for tax relief thanks to a new North Carolina Farm Act that was approved by the state over the summer.
The Polk County Board of Commissioners met Sept. 5 and heard a presentation from county attorney Jana Berg about what the new law means.
Berg said on July 12, N.C. Governor Roy Cooper signed into law the NC Farm Act, effective immediately, that changed some laws in respect to farms and provided some tax relief.
The law increases property that is eligible for present use value by including within the required $1,000 worth of gross annual income from farming activities, fees generated from renting pastureland. The new law also now includes the sale of bees or products derived from beehives, other than honey. Honey production already qualifies for the present use program.
Berg said in other words, if you didn’t previously qualify, yet you rented your pastureland for horses or livestock to graze on your property and you generate at least $1,000 per year in income, you could now qualify.
The present use value program still requires there be at least 10 acres and the farming activity that generates income has to have been done for at least three years in order to qualify.
Berg said the 10 acres of property is still a requirement but it does not have to be contiguous land.
Another benefit to farms with the new law is it exempts farm buildings from zoning regulations.
New or existing residences that are constructed to the building code and are occupied by the owner, lessee or the operator of a farm and other buildings or structures that are sheltering or supporting the farm use and operations, are exempt from zoning regulations, according to the law.
“Let’s say you had a run-in shed and you previously had problems meeting setback requirements where you had buildings that housed farming equipment,” Berg said.
Residences that are built to the building code and other structures (other structures don’t have to be built to the building code) do not have to meet zoning requirements any longer, Berg said.
“This is all fascinating,” commissioner Ray Gasperson said.
Gasperson said if he built a shed, as his farm is currently in the present use value program, he could build it up to his property line.
Berg said Gasperson is exempt from the zoning regulations, but someone in a subdivision may have other regulations.
“So, for example, your zoning regulations required a vegetative buffer around a particular use but it was a farm use,” Berg said. “You wouldn’t have to put (the buffer) there.”
Berg said a farm that’s enrolled in the present use value program or a farm that has a qualified farmer’s sales tax exemption, those structures don’t have to following the zoning codes.
The $1,000 per year gross income now includes from the sale of agriculture products produced from the land, grazing fees for livestock or sale of bees or products derived from bee hives other than honey.
Gasperson said people need to remember it takes three years to get into the present use value program.
Berg said a farm needs to have three years’ worth of income meeting the requirement to fit the program.
“You have to show $1,000 worth of income from a qualified farm activity for a three-year period to be enrolled in the present use value program,” said Berg. “So people need to be aware come January, if they have prior years’ income, including grazing fees, which is new, or selling products from bees, which is also new, that you can now qualify with those two new forms of income to meet that present use value.”
Other farming activities that qualify for the income requirement for the present use value program include activities like weddings on an already established farm.
The new law defines agri-tourism as farming, ranching, natural activities or attractions, including but not limited to weddings, receptions, meetings, demonstrations of farm activities, meals and other events that are taking place on a farm because of its farm or rural status. That doesn’t mean someone can build a barn specifically to hold weddings, but if a farm decided to use a barn to hold weddings, receptions or meetings, that income would now qualify.
Berg said this is good news for Polk County because in the past when the county went through the revaluation process, a lot of property owners were harmed by increasing property values.
And a lot of those property owners may have qualified for the present use value program because they leased their property for grazing.
“So, (Polk County Commissioners) actually submitted a resolution to the state asking for some tax relief,” Berg said, “and I don’t know that this is in response to that, but we got something. So, I’m really pleased with that.”
More information about the present use value program in Polk County can be found at polknc.org under the tax department page.