Agricultural exemption does not apply to homesite and residential improvements.
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Name: Appraisal Journal Publisher: The Appraisal Institute Audience: Trade Format: Magazine/Journal Subject: Business; Real estate industry Copyright: COPYRIGHT 2011 The Appraisal Institute ISSN: 0003-7087
Date: Fall, 2011 Source Volume: 79 Source Issue: 4

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According to the Supreme Court of Idaho, Idaho Code (I.C.), section 63-604 is unambiguous and does not exempt contiguous homesites not actively devoted to agriculture.

In 2004, Walter and Judith Kimbrough purchased a small farm in Canyon County, Idaho. The Kimbroughs dedicated all but 2 acres of their land to growing alfalfa. The remaining 2 acres contained agricultural buildings and the Kimbroughs' home. Of the 14.76 acres subject to assessment, the Canyon County Assessor (the County) exempted 13.76 acres of the farm from taxation under LC. section 63-604, which allowed for an exemption of land actively devoted to agriculture. The County assessed the remaining acre upon which the homesite was located at market value.

In 2007, the assessment more than doubled. The County attributed nearly all of the added assessment to the increased value of the homesite and residential improvements. The Kimbroughs appealed their 2007 property-tax assessment first to the Canyon County Board of Equalization. Then they appealed to the Idaho Board of Tax Appeals, and later appealed to the district court. Each review resulted in an affirmation that the County was correct to value the one-acre homesite and residential improvements at market value separately from the Kimbroughs' agricultural acreage.

On appeal, the Kimbroughs conceded that the one-acre homesite was not actively devoted to agriculture. They contended that under the language of I.C. section 63-604, homesites contiguous with land actively devoted to agriculture should also be included in the agricultural exemption from tax assessment. The Kimbroughs asserted that because the statute states that the total area of such land, including the homesite, must exceed five acres to qualify for the agricultural exemption, the statute exempts the homesite itself, in addition to the farmland. The County argued the homesite acreage was only relevant when determining whether a parcel of farmland is large enough to qualify for the agricultural exemption.

The Idaho Supreme Court noted that while the Kimbroughs had their own interpretation of I.C. section 63-604, not all interpretations are reasonable. The supreme court affirmed the district court's ruling and found the statute's plain language to be unambiguous, having been previously interpreted to be applicable only to land that is actively devoted to crop or livestock production and is not in a crop-rotation program. Thus, homesites contiguous with farmland are not subject to the tax exemption for land actively devoted to agriculture under I.C. section 63-604.

Kimbrough v. Idaho Board of Tax Appeals

Supreme Court of Idaho

February 4, 2011

150 Idaho 417 (2011)
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