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X105 -277.2 CH. 105. TAXATION §105 -277.2
<br />Editor's Note. — Section 56 of Ses-
<br />sion Laws 1985, c. 656 provides that the
<br />ict does not affect the rights or liabili-
<br />ties of the State or a taxpayer arising
<br />ender a section amended or repealed by
<br />:he act before its amendment or repeal,
<br />for affect the right to any refund or
<br />xedit of a tax, such as the franchise tax
<br />credit under § 105- 120.2(d) or
<br />§ 105- 122(d) that would otherwise have
<br />been available under a section amended
<br />or repealed by the act before its amend-
<br />ment or repeal.
<br />Effect of Amendments. — The 1989
<br />amendment, effective July 1, 1989, re-
<br />wrote subdivision (f).
<br />105 - 277.2. Agricultural, horticultural and forest -
<br />land — Definitions.
<br />For the purposes of G.S. 105 -277.3 through 105 -277.7 the follow -
<br />.ng definitions shall apply:
<br />(1) "Agricultural land" means land that is a part of a farm unit
<br />that is actively engaged in the commercial production or
<br />growing of crops, plants, or animals under a sound man-
<br />agement program. Agricultural land includes woodland
<br />and wasteland that ..is a part of the farm unit, but the
<br />woodland and wasteland included in the unit shall be ap-
<br />praised under the use -value schedules as woodland or
<br />wasteland. A farm unit may consist of more than one tract
<br />of agricultural land, but at least one of the tracts must
<br />meet the requirements in G.S. 105- 277.3(a)(1), and each
<br />tract must be under a sound management program.
<br />(2) "Forestland" means land that is a part of a forest unit that
<br />is actively engaged in the commercial growing of trees un-
<br />der a sound management program. Forestland includes
<br />wasteland that is a part of the forest unit, but the waste-
<br />land included in the unit shall be appraised under the use -
<br />value schedules as wasteland. A forest unit may consist of
<br />more than one tract of forestland, but at least one of the
<br />tracts must meet the requirements in G.S. 105- 277.3(a)(3),
<br />and each tract must .be under a sound management pro-
<br />gram.
<br />(3) "Horticultural land" means land that is a part of a horticul-
<br />tural unit that is actively engaged in the commercial pro-
<br />duction or growing of fruits or vegetables or nursery or
<br />floral products under a sound management program. Hor-
<br />ticultural land includes woodland and wasteland that is a
<br />part of the horticultural unit, but the woodland and waste-
<br />land included in the unit shall be appraised under the use -
<br />value schedules as woodland or wasteland. A horticultural
<br />unit may consist of more than one tract of horticultural
<br />land, but at least one of the tracts must meet the require-
<br />ments in G.S. 105- 277.3(a)(2), and each tract must be un-
<br />der a sound management program.
<br />(4) "Individually owned" means owned by:
<br />a. A natural person; or
<br />b. A corporation having as its principal business one of the
<br />activities described in subdivisions (1), (2), and (3) and
<br />whose shareholders are all natural persons actively
<br />engaged in the business of the corporation or a relative
<br />of a shareholder who is actively engaged in the busi-
<br />ness of the corporation.
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<br />P.
<br />§105-277.2 CH. 105. TAXATION § 105 -277.2
<br />(5) "Present -use value" means the value of land in its current
<br />use as agricultural land, horticultural land, or forestland,
<br />based solely on its ability to produce income, using a rate
<br />of nine percent (9 %) to capitalize the expected net income'..
<br />of the property and assuming an average level of manage-
<br />ment.
<br />(5a) "Relative" means:
<br />a. Spouse;
<br />b. A lineal ancestor;
<br />c. A lineal descendant;
<br />d. A brother or sister, including a stepbrother or stepsis-
<br />ter;
<br />e. An adopted or adoptive child, parent, grandchild, or
<br />grandparent; or
<br />�f. A spouse of a person listed in paragraphs b. through e.
<br />(6) Sound management program " means a program of produc-
<br />tion designed to obtain the greatest net return from the '
<br />land consistent with its conservation and long -term im- .
<br />provement. (1973, c. 709, s. 1; 1975, c. 746, s. 1; 1985, c. 4
<br />628, s. 1; c. 667, ss. 1, 4; 1987, c. 698, s. 1.)
<br />Editor's Note. — Session Laws 1985, ever occurs earlier, rewrote subdivision
<br />c. 628, s. 1, effective January 1, 1987, (5); defining "Present use value."
<br />and applicable to each county when that Legal Periodicals. — For survey of ,
<br />county conducts a general reappraisal of 1980 tax law, see 59 N.C.L. Rev. 1233
<br />property or on January 1, 1994, which- (1981).
<br />CASE NOTES
<br />Statutory Scheme is Tax Defer- Property Tax Comm'n, 48 N.C. App. �±
<br />ment. — The statutory scheme for taxa- 245, 269 S.E.2d 636 (1980), cert. denied,
<br />tion of property qualifying for present 301 N.C. 727, 276 S.E.2d 287 (1981).
<br />use value treatment as defined in this Property to Be Valued on Ability
<br />section and § 105 -277.3 is a tax defer- to Produce Income in Present Use. —
<br />ment. - In re Parker, 76 N.C. App. 447,
<br />Clear legislative intent under this sec -
<br />333 S.E.2d 749 (1985). tion is that property be valued on the
<br />Principal Business of a Corpora-
<br />basis of its ability to produce income in
<br />tion. — Factors which should be looked the manner of its present use; all other
<br />at in determining the principal business
<br />of a corporation for present use value- uses for which the property might be
<br />tion other than gross income are net in- employed, and the many factors enunci-
<br />come or profit and its source, annual re- ated in § 105- 317(a), are irrelevant and
<br />ceipts and disbursement, the purpose of immaterial. In re McElwee, 304 N.C. 68, ;
<br />the corporation as stated in its corporate 283 S.E.2d 115 (1981).
<br />charter and the actual corporate func- Applied in Development Assocs. v.
<br />tion in relation to its stated corporate Wake County Bd. of Adjustment, 48
<br />purpose. W.R. Co. v. North Carolina N.C. App. 541, 269 S.E.2d 700 (1980).
<br />OPINIONS OF ATTORNEY GENERAL
<br />Interest Is Due on Deferred Taxes. Honorable B.D. Schwartz, N.C. House of
<br />— See opinion of Attorney General of Representatives, 43 N.C.A.G. 64 (1973).
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