Trenton— Legislation long-championed by Senator Jennifer Beck (R- Monmouth) and Senate President Steve Sweeney (D- Gloucester/Cumberland/Salem) to prevent abuse of the state’s farmland assessment law has cleared the final hurdle to passage by the full Senate. The Legislation, S-589, was approved the Senate Budget and Appropriations Committee.
“The current threshold of $500 in agricultural sales set forth in New Jersey’s farmland assessment law has not been increased since its inception and is easily abused,” said Beck. “This bill modernizes the law to better ensure that only those who actively work the land receive the 98% property tax break on their property.”
“Clearly this program is being taken advantage of and it’s the taxpayers who ultimately lose the most. It’s long past time we update the farmland assessment law. This protects both real farmers and the taxpayers of New Jersey, ” said Sweeney.
The bill would boost the threshold of sales derived from farming activity to $1000 per year from the current $500, and provide for a review of the sales threshold every three years. This number was selected based on a 2007 study by Rutgers which calculated how many farms would be disqualified at minimum revenue qualifications of $1000, $2500 and $10, 000. A $10, 000 was estimated to take 398, 093 of New Jersey`s approximately 982, 000 acres of farmland off the preservation rolls.
The legislation also would require program applicants to submit evidence of agricultural sales and/or income to the Department of Agriculture, and require tax assessors to undergo training in farmland assessment as a condition of licensure. Most importantly, the State Division of Taxation and State Board of Agriculture would issue guidelines to tax assessors to aid them in defining legitimate farming activity.
Abusers of the program would face a $5000 fine, in addition to restitution of all taxes inappropriately avoided on property fraudulently claimed under the assessment exemption and other penalties.
“There is something wrong when an individual can sell three cords of firewood to himself and claim the same tax break as farmers producing legitimate agricultural output,” Beck continued. “The abuse of this program is well documented in the press and by the State Auditor and needs to end.”