42.20.682 FAMILY FARM
(1) Parcels of land between 20 acres and 160 acres that do not meet income requirements for agricultural eligibility as outlined in 15-7-202, MCA, but which are used for farming or ranching, or as a part of a family farm or ranch business as described in 15-7-202, MCA, may be valued as agricultural land if the taxpayer provides sufficient evidence, as described in this rule, to prove the property is part of a family farm or ranch business.
(2) The following proof of eligibility requirements will be considered when the owner of the land applies for agricultural land classification:
(a) the subject property must be located within 15 air miles of the family-operated farm or ranch;
(b) the owner of the subject property must submit proof that 51 percent or more of the owner's Montana annual gross income is derived from agricultural production;
(c) the property taxes on the subject property are paid by the family-operated farm or ranch business, which may be a family corporation, family partnership, sole proprietorship, or a family trust; and
(d) the owner of the property must submit documentation proving that at least 51 percent of the farm or ranch entity's Montana annual gross income is derived from agricultural production.
(3) If the conditions of (2) are satisfied, the land is eligible for agricultural classification.
(4) The department will accept a copy of a cancelled check as proof of payment of property taxes by the family-operated business entity. Other acceptable proof of payments of the property taxes will be considered on a case-by-case basis.
(5) If the owner of the subject property, which does not meet the requirements to be classified and valued as agricultural land, is a shareholder, partner, owner, or member of the family-operated farming or ranching entity involved in Montana agricultural production, the property owner may qualify the subject property as agricultural land if proof is submitted that details the legal relationship between the owner and the family-operated farming or ranching business entity. This proof must include:
(a) a copy of the documents that establish a legal relationship with the family-operated farming or ranching business entity, such as the documents on file with the Secretary of State; and
(b) proof that at least 51 percent of the property owner's or family-operated farming or ranching business entity's Montana annual gross income comes from agricultural production.
(6) If the conditions of this rule are satisfied, the land is eligible for classification as agricultural land according to its use.
(7) For all applications received under this rule, the acceptable proof of income will be the most recent year's Montana individual and/or corporate tax return, whichever is appropriate. The forms presented as proof must include all state and federal tax forms that detail the amount of income received from agricultural production as well as the amount of Montana gross income.
(8) A current county farm and ranch reporting form that reflects any livestock or personal property used on the land must have been filed by the current landowner with the local department office.
History: 15-1-201, MCA; IMP, 15-7-201, 15-7-202, 15-7-203, 15-7-206, 15-7-207, 15-7-208, 15-7-209, 15-7-210, 15-7-212, MCA; NEW, 2014 MAR p. 2994, Eff. 12/12/14.