Agricultural

Agricultural status is granted to businesses producing agricultural commodities for profit. Hobby farms, community gardens, personal gardens or orchards and small-scale private operations do not typically qualify.

The following information is provided to assist the public in understanding the general guidelines pertaining to agricultural classification. Since each agricultural operation has its own uniqueness in terms of the type of operation, the Assessor must look at every operation on a case-by-case basis. Classification of property as agricultural is accomplished by applying the Arizona Revised Statutes and following the Department of Revenue's agricultural manual.

The Arizona Revised Statutes define the agricultural classification as meeting the following requirements: the primary use, the reasonable expectation of operating profit and the functional contribution of non-contiguous parcels. The property owner must file the proper documentation for review by the Assessor. The zoning of the property is not controlling; it is the actual use of the property that determines whether it qualifies agriculturally.

The following information provides a more in-depth explanation on the criteria used to determine whether a parcel shall be classified as an agricultural use for valuation purposes.

Agricultural Qualification Guidelines

BOS AG Trifold(PDF, 651KB)

Arizona Revised Statutes

ARS 42-12151. Definition of agricultural real property

ARS 42-12152. Criteria for classification of property used for agricultural purposes

ARS 42-12153. Application for classification of property used for agricultural purposes

ARS 42-12154. Approval of nonconforming property

ARS 42-12155. Notice of approval or disapproval; appeal

ARS 42-12156. Notice of change in use

ARS 42-12157. Recapture and penalty for false information or failure to notify of change in use

ARS 42-12158. Inspections by county assessor

ARS 42-12159. Restoration of agricultural classification and valuation; refund

ARS 42-13101. Valuation of agricultural land

ARS 42-13102. Statement of agricultural lease

Qualification Requirements

Documentation Requests

The assessor can request additional documentation for further analysis of parcels; failure of the taxpayer to supply information requested may disqualify the property for "agricultural land" classification. Additional documentation that may prove helpful in establishing a claim for "agricultural land" classification includes:

  • IRS Form Schedule F, Profit and Loss Statement (or equivalent)
  • Leases
  • Receipts for services rendered and items purchased relevant to the agricultural operation
  • Brand inspection certificates
  • Sales invoices of agricultural products or livestock sold
  • Grazing Plan
  • Business Plan (for new operations)

Use

Providing documentation that shows the grazing animals satisfy the majority of the below criteria provides documentation for qualifying the land as a ranch.

  • The animals can be bought and sold, e.g. a brand inspection certificate or a bill of sale is provided when transferring ownership of the animal.
  • Veterinary and other services are provided for the health of the animals.
  • The animals are confined to the property and shelter may be provided.
  • The animals are identifiable by brands, tags, or tattoos and graze on the land.

Physical Review

Physical inspections may be conducted to substantiate the use as agricultural. The following are examples of things that may be considered:

  • Grazing livestock or recent evidence of grazing activity
  • Preparation/planting/harvesting/selling crops
  • Topography and physical geology of the land
  • Accessibility
  • Farm/ranch outbuildings
  • Agricultural machinery and equipment
  • Fence, livestock water, irrigation ditches and canals
  • Evidence of soil conservation practices

Agricultural Land Use Application

The Agricultural Land Use Application (DOR 82916) is to be used by the owner or the owner's designated agent to apply for agricultural classification pursuant to A.R.S. § 42-12153(B), under the following circumstances.

  1. For land that is not currently qualified or classified as agricultural property.
  2. Change in ownership or change in use - the owner must file this application within sixty days of to maintain agricultural classification of the property.
  3. Renewal and / or update of agricultural status (required every 4 years).

New applications MUST be filed by June 1st to be eligible for the subsequent tax year.

Example:

Filing before June 1, 2017 will be considered for the 2018 Tax Year
Filing after June 1, 2017 will be considered for the 2019 Tax Year

Incomplete applications will NOT be accepted.

A.R.S. § 42-12157 states that intentionally giving false information on the application form(s), or a failure to provide the notice required under A.R.S.§ 42-12156, will cause the following to occur:

  • An immediate reclassification of the land to a non-agricultural use and value.
  • The owner will become liable for additional taxes on the difference between the nonagricultural full cash value and the full cash value of the property "...for all of the tax years in which the property was classified based on the false information."
  • The owner will also be liable for a twenty-five percent penalty on those additional taxes computed, although the Assessor may abate this penalty for good cause.

Failure to Apply for Agricultural Use Classification

Land is not eligible for classification unless the owner or owner's designated agent has filed a timely and completed Agricultural Land Use Application form with the County Assessor. A.R.S.§ 42-12153

Agricultural Land Use Application - Please complete all three documents

Agricultural Lease Abstract - Please complete both documents

Applications should include the following:

  • Agricultural Land Use Form
  • Statement of Agricultural Lease Abstract
  • Name and phone number of contact person
  • Current Profit and Loss Statement (3 yrs of the 5 yrs prior to application)
  • Number of Animal Units
  • Copy of current Cattle Brand Certificate
  • Copy of Contracts - for leases (private & government), agreements, sub-leases

Additional Documentation may be required:

  • Current Schedule F filed with the Internal Revenue Service
  • Copy of Insurance for Equine activities on the property
  • Copy of Contracts for Breeding, Boarding, or Training
  • Crop Plan or grazing plan
  • Business Plan
  • Documentation of Agricultural Status with other Arizona county Assessor's Office
  • Other

*** Additionally, we will need to do a field inspection in order to confirm the use and condition of all improvements if there are any on the parcel(s).

DOR Agricultural Manual

DOR Agricultural Manual

Email

Assessor.Ag@yavapaiaz.gov

Back to top