You asked (1) what property tax exemptions exist in current law for farm machinery, horses, and ponies and (2) whether there are has been any bill introduced in the 2005 session that would provide additional tax relief for these items. In addition to the information below, we enclose a 2004 OLR report describing all existing agriculture and farming-related property tax exemptions (2004-R-0001).

CURRENT EXEMPTIONS

Current law has both mandatory and local-option property tax exemptions for farm machinery and horses. Towns must exempt the following from property taxes:

Towns also have the option of exempting between $ 100,000 and $ 200,000 of the value of farm machinery other than motor vehicles (§12-91 (b)).

In order to be eligible for these exemptions, a farmer must individually or as a part of a group, partnership, or corporation have derived at least $ 15,000 per year in gross sales from the farming operation or incurred at least $ 15,000 in farm-related expenses in the most recent assessment year before the assessment year to which the exemption applies. A farmer must apply annually for the exemptions with the local assessor or board of assessors.

2005 PROPOSED LEGISLATION

One proposed bill was introduced in the current legislative session to expand the tax exemptions for horses, farm equipment, and greenhouses (HB 5366, copy enclosed). It would fully exempt horses from property tax, whether or not they were used for farming. It would also fully exempt leased farm equipment and greenhouses. The bill was referred to the Finance, Revenue and Bonding Committee on January 19, 2005. Because the committee took no action on it, the bill is dead for the session, unless its contents are included in another bill through an amendment.

JL: ro