Summary of a Recent
Judicial Development in
Urbanization

Farm Property Split by Highway Can be Assessed as Two Separate Parcels
with Independent Determinations of Market Value

M. Sean Brister
National AgLaw Center Research Associate

Summary of Decision

In Marsh v. Tax Commission, No. 20080291-CA, 2009 WL 418812 (Utah Ct. App. Feb. 20, 2009), the Court of Appeals of Utah upheld the State Tax Commission's (Commission) determination that appellant's property could be assessed as two separate parcels and that one such parcel did not meet the statutory requirements to qualify for an agricultural use assessment.

Background

William Marsh owned property on the east and west sides of Highway 89. Id. at *1. The parcel on the west side of the highway was the location of an active farming operation. See id. The parcel on the east side of the highway was used as a residence, for recreational purposes, and for gravel mining. Id. at *2. The Commission determined that the two parcels should be assessed separately and that the east side property neither contributed to the west side's farming operation nor independently qualified for the agricultural use assessment under state law. See Id. at *1.

Arguments

Appellant argued that the two properties should be assessed as one parcel and that the east side property should be granted an agricultural use assessment. Id. Appellant also argued that the residence on the east side property contributed to the west side farming operation because it was a "farmhouse." Id. Appellant further argued that the gravel mining on the east side property was an agricultural use. See id. at *2.

Analysis and Holdings

The appellate court explained that it was to grant the Commission deference on "written findings of fact, while applying a substantial evidence standard of review." Id. at *1. The court ruled that sufficient evidence existed to support the assessment of the property as two separate parcels, specifically citing the Commission's finding that no evidence indicated that the east side property provided storage, staging, or actual production for the west side farm. Id.

Next, the court rejected appellant's farmhouse argument and ruled that a state statute precluded the land under a farmhouse and the land associated with a farmhouse from being used in the determination of land area actually in an agricultural use. Id. Similarly, the court rejected the assertion that gravel mining was an agricultural use, citing a statute requiring mining activities to be assessed at fair market value. Id. at *2.

Finally, the court ruled that the evidence was adequate to support the Commission's ruling that the east side property did not qualify for an agricultural use assessment independent of the west side property because outdoor recreational uses were not sufficient to establish agricultural use. See id. With each of the appellant's issues overruled, the appellate court affirmed the Commission's determination order. Id.

The case was decided on February 20, 2009.