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Volume 11 - Opinions of Counsel SBRPS No. 116

Opinions of Counsel index

Agricultural exemption (generally) (limited liability company ownership) - Agriculture and Markets Law, §§ 305, 306; Limited Liability Company Law, § 201; Real Property Tax Law, § 481:

Otherwise qualifying agricultural land may receive an agricultural assessment when it is owned by a limited liability company.

We have received an inquiry concerning the agricultural assessment program (Agriculture and Markets Law [AML], Article 25 AA; Real Property Tax Law, § 481). The assessor states that a farmer intends to convey agricultural land to a limited liability company for estate planning purposes, but the land will still be farmed after the conveyance of title. The question is whether the land will continue to be eligible to receive an agricultural assessment after the transfer of legal title occurs.

AML, section 305(1)(a), provides, in part, that:

Any owner of land used in agricultural production within an agricultural district shall be eligible for an agricultural assessment pursuant to this section. . . . Such assessment shall be granted only upon an annual application by the owner of such land on a form prescribed by the state board of real property services . . . (emphasis added).

Similar provisions are set forth in AML, section 306(1), regarding agriculturally productive land situated outside an agricultural district. {1}

Some tax exemption statutes limit eligibility to parcels owned by natural persons. For example, the eligible funds veterans exemption (RPTL, § 458) and the alternative veterans exemption (RPTL, § 458-a) require ownership by one or more of the natural persons listed in the statute, such as the veteran or the spouse of the veteran (RPTL, §§ 458(1), 458-a(1)(c)). Therefore, we have opined that neither of the aforementioned exemptions may be approved for a residence owned by a limited liability company (10 Op.Counsel SBRPS No. 97).

In contrast, the Agricultural Districts Law does not require that a “landowner” be a natural person. Moreover, the Limited Liability Company Law provides that “[a] limited liability company may be formed . . . for any lawful business purpose or purposes” (§ 201), which seemingly includes the ownership and/or operation of a commercial farm. Accordingly, in our opinion, the land in question would not be precluded from receiving an agricultural assessment because title has been conveyed to a limited liability company.

December 20, 2007

{1}  AML, section 306(1), provides that “[a]ny owner of land used in agricultural production outside of an agricultural district shall be eligible for an agricultural assessment as provided herein” (emphasis added). Section 306(1) also provides that “[s]uch assessment shall be granted . . . provided the landowner annually submits to the assessor an application for an agricultural assessment on or before the taxable status date”  (emphasis added).