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Oregonians In Action is a non-partisan, non-profit organization representing Oregon home and property owners.  As Oregon's largest property owners association, our mission is to defend the right of private property owners
to make use of their property.  At the legislature, through the courts and at the ballot box, working with the media and through our many educational efforts, OIA works to change Oregon's broken land-use system, a system unlike any in the United States.

OIA Legal Center just won a significant victory! PDF Print E-mail
Written by Administrator   
Tuesday, 18 November 2014 08:26

The OIA Legal Center just won a significant victory for Oregon farmers, ranchers, and rural property owners. Last week, the Oregon Tax Court reversed the Tax Court Magistrate and Jackson County and rejected arguments by the Oregon Attorney General that would have wiped out the Oregon farm tax program as we know it.

The case arose when the Jackson County tax assessor disqualified 20 acres of property owned by Leroy and Nancy Wehde from farm tax deferral. The Wehde's lease their EFU zoned property to a beekeeper who uses the property for keeping his hives and forage for the bees.

According to the County, the Wehde property was not used for farm use, and therefore must be disqualified. We were contacted by the beekeeper and agreed to represent the Wehdes because of the dangerous and potentially devastating arguments raised by the Oregon Attorney General's Office in defense of Jackson County.

At trial, the Attorney General made a series of arguments that can only be considered to be stunning. First, the Attorney General argued that property must be cultivated in order to be considered to be in "farm use" and thus qualify for farm tax deferral. Tell that to an Eastern Oregon rancher.

In this case, the Wehde property was left in its natural state, because, as our expert witness pointed out, bees much prefer a property with a variety of different plants to pollinate and forage rather than land planted in a single crop. Although the property did not have the appearance of a traditional farm, it provided excellent habitat for bees. The Tax Court quickly rejected the AG's argument.

But, unfortunately, we've just begun. The AG next argued that even if the Wehde property was currently in farm use, it should still be disqualified because the property was "underutilized," meaning there was some better type of farm use for the property.

Imagine the mischief that would result from the AG's interpretation. A farmer growing corn, for example, could face disqualification if the County Tax Assessor believe that growing wheat was a more valuable use of the property. Did the legislature really intend to have county tax assessors telling farmers what kind of farming to do in order to qualify for farm tax deferral?

The Tax Court made short work of that argument as well, finding that the Oregon Tax Department rules that the AG relied on did not apply to EFU zoned properties.

It gets worse. Next, the AG argued that the Wehde property was not in "farm use" because the beekeeping was not the "primary" use of the property and because the property was not being used "exclusively" for farm use. The Wehde's allowed their daughter to run two cows on the property to graze, with no intent to sell the cows. According to the AG, the fact that the property was used to graze two cows that weren't for sale disqualified the property, as it was no longer used "exclusively" for farm use.

Imagine if that argument was true - nearly every Oregon farmer and rancher would lose farm tax deferral, as nearly every Oregon farm and ranch maintains uses that aren't "farm uses." A rancher leasing hunting rights to the ranch - disqualified. A farmer hosting the annual church picnic on the farm - disqualified. A farmer with a farm stand on the property - disqualified. You get the picture.

It didn't take the Tax Court long to see through the mischief that would result from this interpretation. The Court correctly found that as long as the "farm use" of the property was the primary use, other secondary, non-farm uses would not disqualify the property from tax deferral.

Which brings us to the last of the AG's arguments Oregon law defines "farm use" to include the "feeding, breeding, management, or sale" of bees or livestock. This definition is obviously key for beekeepers and ranchers. The AG argued that in order for a beekeeper or rancher to qualify for farm tax deferral, they had to demonstrate that they were engaged in all four activities (feeding, breeding, management, and sale) on each acre of land. Holy crap!

If the AG's argument was accepted, ranchers and beekeepers would face an impossible test to qualify for farm tax deferral. While livestock are sometimes "sold" on site, that is not always the case, and it is never the case that a rancher or beekeeper would use every single acre of the ranch/farm to engage in all four activities. This argument would kill farm tax deferral for ranchers and beekeepers.

Fortunately, the Tax Court connected the dots, and held that a rancher or beekeeper need not engage in all four activities in order to qualify for farm tax deferral, as long as the ranch or farm was used for at least one of the four activities.

This case is a complete victory for the Wehde's, but an ever bigger win for Oregon agriculture. Had Jackson County and the Oregon AG prevailed, farm tax deferral in Oregon would have been wiped out.

Last Updated on Tuesday, 18 November 2014 08:35
Looking Forward, Volume 21 Issue 1 PDF Print E-mail
Written by Administrator   
Monday, 05 August 2013 11:35
Here is the latest Oregonians In Action Education Center's Looking Forward: Looking Forward Volume 21 Issue 1 
Last Updated on Monday, 17 November 2014 14:12

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