TRENTON— Legislation long-championed by state Sen. Jennifer Beck and Senate President Steve Sweeney to prevent abuse of the state’s farmland assessment law has been approved by the Senate Environment and Energy Committee.
“The current threshold of $500 in agricultural sales set forth in New Jersey’s farmland assessment law has not been increased since its inception,” said Beck (R-Monmouth). “Our legislation ensures that only property owners who engage in true farming activity are able to take advantage of this significant tax break. The public gets rightly enraged when they hear cases like the one in Middletown, where a real estate developer paid just $31 on 10.5 acres of land for selling $600 worth of honey.”
“Farmland assessments should be reserved for true farmers, not folks who find a way to sell a minimal amount of goods just to take advantage of a tax break, ” said Sweeney (D-Gloucester). “Our state has a rich agricultural past. By closing the holes in the farmland assessment law, we do more to honor that past and protect the future of farming in New Jersey.”
Investigations by Gannett New Jersey Newspapers and the New Jersey State Auditor have shown that the farmland assessment program, which gives a 98% property tax break to qualifying properties, is frequently used as a tax shelter for land owners that do not actively cultivate their land and do only the minimum necessary to qualify for a farmland assessment. In many instances, property that would normally be assessed for tens or hundreds of thousands of dollars in property taxes have tax bills reduced to hundreds of dollars or less.
The auditor’s report also cites lax state and local oversight of the program and less than meaningful penalties for those who are found to be inappropriately claiming eligibility for a farmland assessment.
The bill would boost the threshold of sales derived from farming activity to $1000 per year from the current $500, and provide for a review of the properties every three years. The legislation also would require program applicants to submit evidence of agricultural sales and/or income to the Department of Agriculture, and require tax assessors to undergo training in farmland assessment as a condition of licensure.
“The program is currently too permissive and lacks adequate oversight,” Beck stated. “There is something wrong when an individual can sell three cords of firewood to himself and claim the same tax break as farmers producing legitimate agricultural output. The abuse of this program is well documented and needs to end.”
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