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Volume 1 - Opinions of Counsel SBEA No. 118

Opinions of Counsel index

Farm exemption (structure used for cold storage of apples) - Real Property Tax Law, § 483:

A structure which is used for the cold storage of apples on a farm where such apples are cultivated for sale is entitled to the tax exemption provided by section 483 of the Real Property Tax Law.

Our opinion has been requested as to whether the exemption provided by section 483 of the Real Property Tax Law would apply to a structure erected on a farm and used for the cold storage of apples.

Subdivision 1 of section 483 provides that “[s]tructures and buildings essential to the operation of lands actively devoted to agricultural or horticultural use and actually used and occupied to carry out such operation which are constructed or reconstructed subsequent to January first, nineteen hundred sixty-nine and prior to January first, nineteen hundred seventy-nine shall be exempt from taxation to the extent of any increase in value thereof by reason of such construction or reconstruction for a period of five years.”

Subdivision 3 of section 483 provides, in part, that “[t]he term ‘structures and buildings’ shall include: (a) structures or buildings or portions thereof used directly and exclusively in the raising and production for sale of agricultural and horticultural commodities or necessary for the storage thereof, but not structures or buildings or portions thereof used for the processing of agricultural and horticultural commodities, or the retail merchandising of such commodities.” (emphasis supplied)

Lands actively devoted to the cultivation of an apple orchard are clearly lands devoted to an horticultural use. The exemption applies to any structure or building erected on land which satisfies the other qualifications of the statute, which is used directly and exclusively in the production of horticultural commodities, and which includes a structure or building necessary for the storage of such commodities. Thus, a structure necessary for the cold storage of apples on a farm where such apples are cultivated for sale through the normal channels of an agricultural or horticultural operation would be a structure entitled to exempt status within the intent of the statute. In view of the language of the statute, however, such structure would not qualify for exempt status if used to store apples in a retailing operation.

It should be noted that statutes exempting real property from taxation are generally strictly construed in that all provisions of the exemption statute must be adhered to for the exemption to apply. However, it has been held that an occasional or incidental use not contemplated by the statute would not, of itself, cause the subject property to lose its exempt status. Thus, where there is a bona fide horticultural operation for the cultivation of apples and it is necessary that a structure be erected for the cold storage of such apples until such time as they are disposed of in the general market, an occasional sale of apples so stored to a private individual would not necessarily deprive the structure of its exempt status. It would, in large measure, depend upon the extent of the individual sales involved. Where it is evident that the building was erected primarily to store apples for retail sale on the premises then, of course, the exemption cannot apply to such structure.

March 23, 1970

Updated: