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§105-277.3 CH. 105. TAXATION §105-277.3
<br />105 - 277.3. Agricultural, horticultural and forest-
<br />land - Classifications.
<br />(a) The following classes of property are hereby designated spe-
<br />cial classes of property under authority of Article V, Sec. 2(2) of the
<br />North Carolina Constitution and shall be appraised, assessed and
<br />taxed as hereinafter provided:
<br />(1) Individually owned agricultural land consisting of one or
<br />more tracts, one of which consists of at least 10 acres that
<br />are in actual production and that, for the three years pre-
<br />ceding January 1 of the year for which the benefit of this
<br />section is claimed, have produced an average gross income
<br />of at least one thousand dollars ($1,000). Gross income in-
<br />cludes income from the sale of the agricultural products
<br />produced from the land and any payments received under a
<br />governmental soil conservation or land retirement pro-
<br />gram. Land in actual production includes land under im-
<br />provements used in the commercial production or growing
<br />of crops, plants, or animals.
<br />(2) Individually owned horticultural land consisting of one or
<br />more tracts, one of which consists of at least five acres that
<br />are in actual production and that, for the three years pre-
<br />ceding January 1 of the year for which the benefit of this
<br />section is claimed, which have either:
<br />a. Been used to produce evergreens intended for use as
<br />Christmas trees and met the qualifying or gross in-
<br />come requirements established by the Department of
<br />Revenue for the land; or
<br />b. Produced an average gross income of at least one thou-
<br />sand dollars ($1,000).
<br />Gross income includes income from the sale of the horti-
<br />cultural products produced from the land and any pay-
<br />ments received under a governmental soil conservation or
<br />land retirement program. Land in actual production in-
<br />cludes land under improvements used in the commercial
<br />production or growing of fruits or vegetables or nursery or
<br />floral products.
<br />(3) Individually owned forestland consisting of one or more
<br />tracts, one of which consists of at least 20 acres that are in
<br />actual production and are not included in a farm unit.
<br />(b) In order to come within a classification described in subdivi-
<br />sion (a)(1), (2) or (3), above, the property must, if owned by natural
<br />persons, also:
<br />(1) Be the owner's place of residence; or
<br />(2) Have been owned by the current owner or a relative of the
<br />current owner for the four years preceding January 1 of
<br />the year for which the benefit of this section is claimed.
<br />If owned by a corporation, the property must have been owned by
<br />the corporation or by one or more of its principal shareholders as
<br />defined in G.S. 105- 277.2(4)b for the four years immediately preced-
<br />ing January 1 of the year for which the benefit of this section is
<br />claimed. Notwithstanding the provisions of G.S. 105- 277.2(4)b,
<br />above, a corporation qualifying for a classification described in G.S.
<br />105 -277.3 shall not lose the benefit of the classification by reason of
<br />the death of one of the principal shareholders provided the dece-
<br />§105 -277.3 CH. 105. TAXATION §105 -277.3 =.,
<br />dent's ownership passes to and remains in a relative of the dece-
<br />dent.
<br />(c) In addition, property may come within one of the classifica-
<br />tions described in subsection (a) above, if (i) it was appraised at its
<br />present use value or was eligible for appraisal at its present use
<br />value pursuant to that subsection at the time title to the property
<br />passed to the present owner, and (ii) at the time title to the property
<br />passed to the present owner he owned other property classified un-
<br />der subsection (a). Classification pursuant to this subsection shall
<br />not affect any liability for deferred taxes under G.S. 105- 277.4(c) if
<br />such taxes were otherwise due at the time title passed to the
<br />present owner.
<br />(d) Enrollment in the federal Conservation Reserve Program au-
<br />thorized by Title XII of the Food Security Act of 1985 (Pub. L.
<br />99 -198), as amended, shall not preclude eligibility of land for
<br />present use value treatment solely on the grounds that the land is
<br />no longer in actual production, and income derived from participa-
<br />tion in the federal Conservation Reserve Program may be used in
<br />meeting the minimum income requirements of this section either
<br />separately or in combination with income from actual production.
<br />Land enrolled in the federal Conservation Reserve Program shall
<br />be assessed as agricultural land if it is planted in vegetation other
<br />than trees, or as forest land if it is planted in trees. (1973, c. 709, s.
<br />1; 1975, c. 746, s. 2; 1983, c. 821; c. 826; 1985, c. 667, ss. 2, 3, 6.1;
<br />1987, c. 698, ss. 2 -5; 1987 (Reg. Sess., 1988), c. 1044, s. 13.1; 1989,
<br />cc. 99) 736.)
<br />Cross References. - As to taxation
<br />of lessees and users of tax- exempt
<br />cropland or forestland, see § 105 - 282.7.
<br />Editor's Note. - Session Laws 1987,
<br />c. 698, s. 7 adds a new section to Session
<br />Laws 1985, c. 667, to read: "Sec. 6.2. If
<br />property loses its eligibility for use -
<br />value classification because of the
<br />amendments made by Section 2 of this
<br />act [which rewrote subdivisions (a)(1) to
<br />(a)(3)], no deferred taxes are due on the
<br />property and the lien for the deferred
<br />taxes that would otherwise be payable is
<br />extinguished."
<br />Session Laws 1989, c. 99, s. 2 provides
<br />in part: "The first tax year for which the
<br />benefit of this act may be claimed is
<br />1989. Notwithstanding the provisions of
<br />G.S. 105- 277.4(a), an application for the
<br />benefit provided in this act for the 1989
<br />tax year shall be considered timely if it
<br />is filed on or before September 1, 1989."
<br />Effect of Amendments. - The 1987
<br />(Reg. Sess., 1988) amendment, effective
<br />for taxable years beginning on or after
<br />January 1, 1986, added subsection (d).
<br />Session Laws 1989, c. 99, s. 1, effective
<br />for taxable years beginning on or after
<br />January 1, 1989, and applicable to prop-
<br />erty transferred on, before, or after that
<br />date, in subsection (c) substituted "one
<br />of the classifications described in subsec-
<br />tion (a) above, if (i)" for "the classifica-
<br />tion described in subdivision (1) or (2)
<br />above, if (1)," substituted "subsection"
<br />for "section," substituted "(ii)" for "(2),"
<br />and substituted "subsection (a)" for
<br />"subdivision (a)(1) or (2) above" in the
<br />first sentence.
<br />Session Laws 1989, c. 736, s. 1, effec-
<br />tive for taxable years beginning on or
<br />after January 1, 1990, substituted
<br />"which have either" for "have produced
<br />an average gross income of at least one
<br />thousand dollars ($1,000)" at the end of
<br />the introductory sentence in subdivision
<br />(a)(2), and added paragraphs (a)(2)a and
<br />(a)(2)b.
<br />Legal Periodicals. - For survey of
<br />1980 tax law, see 59 N.C.L. Rev. 1233
<br />(1981).
<br />562 ; 563
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