Farmland Assessment Case Won’t Be Decided ‘Till the Cows Come Home

by: Michael Realbuto
1 Nov 2021

A recent Tax Court decision in 187 Dey Road Association, LLC v. South Brunswick by the Honorable Mark Cimino, J.T.C., chose not to address whether a 65-acre parcel of property should receive a farmland assessment or be obligated to pay rollback taxes. Rather, the Court held that summary judgment was inappropriate due to the factual questions in dispute among the parties.

The subject property consisted of 83.53 acres in the Township of South Brunswick (“the Township). Of the 83.53 acres, one acre is devoted to residential use for a home located on the property. Through 2017, the Township’s tax assessor granted farmland assessment for 82.53 acres. For 2018, the Middlesex County Board of Taxation determined that a partial rollback judgment be entered for 65 acres due to no agricultural use. It was undisputed that the 16.53-acre portion of the property is utilized for the growing of crops, pasturing of goats and sheep, and contains appurtenant woodlands. The dispute centered around the rear 65 acres of the property, which is primarily wooded and is traversed by a stream.

On motion for summary judgment, the taxpayer argued that he allows goats and sheep to graze the 65 acres, but had not been able to do so in 2018 due to flooding caused by heavy rainfall and beaver activity damming the traversing stream. The beaver activity was significant enough for the taxpayer to obtain a beaver damage control permit for 2018 from the Division of Fish and Wildlife, Department of Environmental Protection. The rear 65 acres is not fenced; however, the Township disputed the assertion that grazing activity was taking place on the 65 acres.

The Farmland Assessment Act of 1964 was adopted in response to a New Jersey constitutional amendment allowing land actively devoted to “agricultural” or “horticultural” uses to be assessed differently than other lands in the state. In particular, land assessed as farmland is to be valued as if its highest and best use is agricultural or horticultural use. This is typically less than the value for other uses for which land is suitable. To receive a farmland assessment, the land must be 5 acres or more and be “actively devoted to agricultural or horticultural use” for the two years prior to the current tax year. Land is deemed to be actively devoted to agricultural or horticultural use when the amount of gross sales averages at least $1,000 per year during the two-year period preceding the tax year at issue and is at least 5 acres in area.

If land which is farmland assessed is put to a use other than agricultural or horticultural, it is subject to additional taxes (referred to as “rollback taxes”) in an amount equal to the difference between the value of the property as farmland assessed and the value of the property assessed the same as other property in the taxing district. The rollback tax applies not only to the current tax year but the two years prior.

Here, the Tax Court ultimately held that, because the parties were sharply divided on whether there was grazing taking place on the back 65 acres, a question of factual credibility exists which cannot be resolved on summary judgment. Additionally, depositions and paper discovery still remained outstanding. In sum, the Court opined that both parties need to be given the full and fair opportunity to develop the record through discovery. Notwithstanding the Court’s ultimate holding, the Court provided the parties with relevant caselaw which may help guide the parties in focusing discovery and resolving the dispute. In the event that the parties cannot resolve the matter during the discovery period, the Court made it clear that a trial would need to be held to determine the facts of the case before the court is able to apply the law to the facts.

Judge Cimino’s decision clearly demonstrates that the Tax Court is reluctant to render a decision on the merits if there are factual inquiries that remain outstanding. Indeed, prior to filing a motion for summary judgment, litigants should actively pursue outstanding discovery and potentially attempt to resolve the matter prior to seeking court intervention. If you believe your property was incorrectly assessed, contact McKirdy, Riskin, Olson & DellaPelle, P.C. to speak with an experienced property tax appeal attorney who can guide you through every stage of the litigation process. To view the full 187 Dey Road Association, LLC v. South Brunswick decision, click here.