Agricultural Land and Property Taxes
History of Agricultural Land Valuation
Colorado Constitution and Statutes prescribe that the actual value of agricultural lands, exclusive of buildings, shall be determined by consideration of the earning or productive capacity of the land over a reasonable time period. These earnings are capitalized into actual value.
In 1969, individuals representing the agricultural community met with the Colorado Tax Commission (now called the Division of Property Taxation) to establish criteria to carry out the law. They agreed upon the following provisions:
- Earning or productive capacity would be determined by measuring the landlord's net income.
- A reasonable time period would be the current 10-year average.
Agricultural Land Defined
Colorado Revised Statutes (§ 39-1-102(1.6)(a)(I)(A), C.R.S.) defines agricultural land as one of the following:
- A parcel of land, whether located in an incorporated or unincorporated area and despite the uses for which such land is zoned, that was used the previous two years and presently is used as a farm or ranch or being restored through conservation practices. The conservation practice must be a plan under the Conservation Reserve Program (CRP) or a plan approved by an appropriate conservation district. Agricultural land includes land under the residence and land under support buildings if they are part of the operation.
- A parcel of land that has at least 40 acres of forest land with a forest management plan. The land must be used to produce tangible wood products that originate from the productivity of the land for the primary purpose of obtaining a monetary profit.
- A parcel of land that consists of at least 80 acres, or less than 80 acres if the parcel does not contain any residential improvements, is subject to a perpetual conservation easement. The area is classified by the assessor as agricultural land at the time the easement was granted, if the easement was to a qualified organization, or if the easement was granted exclusively for conservation purposes, and if all current and contemplated future uses of the land are described in the conservation easement. This provision does not include any portion of such land that is actually used for non-agricultural commercial or residential purposes.
- A parcel of land, used as a farm or ranch, that the owner has a decreed water rights or a final permit to appropriated ground water for purposes other than residential purposes, and the water appropriated under such right or permit is used for the production of agricultural or livestock products on the land.
- Farm - A parcel of land that is used to produce agricultural products that originate from the land’s productivity for the primary use of obtaining a monetary profit; i.e., crops have been raised, harvested, and or sold. §39-1-102(3.5), C.R.S.
- Improvements - Improvements are all structures, buildings, fixtures, fences, and water rights attached to the land. Homes and buildings are appraised and valued separately from the land. Water rights, fences, windmills, and sprinklers are improvements that are appraised and valued as a unit with the land. §39-1-102(6.3)
- Ranch - A parcel of land that is used for grazing livestock for the primary purpose of obtaining a monetary profit. Livestock means domestic animals that are used for food for human or animal consumption, breeding, draft, or profit. §39-1-102(13.5), C.R.S.
- Integral Use - The land under any residence on agricultural property will be determined to be integral to the agricultural operation if the individual occupying the residential improvement either regularly conducts, supervises, or administers material aspects of the agricultural operation or is the spouse, or a parent, grandparent, sibling, or child of the individual. §39-1-102(1.6)(a)(I)(B), C.R.S.
Continued Agricultural Use
Because the method for valuing agricultural land is based on production, the assessor will periodically inspect the property to verify the continued use for agricultural purposes, as well as verify typical production yields and operating expenses of the agricultural operation. To ensure your property is classified properly, the assessor will request documents which demonstrate agricultural use, such as a grazing lease agreement, 1040-F or equivalent IRS form, sales invoices of agricultural products or livestock, financial statements or brand inspection certificates. An agricultural land classification questionnaire is requested from all properties in Gunnison County with agricultural designation.
If you believe your property is incorrectly classified and should be classified as agricultural property, you may complete an Agricultural Land Classification Questionnaire. Attach supporting documentation, and mail to:
Gunnison County Assessor
221 N. Wisconsin St.
Gunnison, CO 81230
All information supplied is treated as confidential information. In order to make an informed decision on the proper classification, all information will be analyzed, but the classification of your property will not be based solely on the information you supply.