Ownership examples can be:
- an individual
- a business entity with specific requirements
- a trust that meets specific requirements
- a testamentary trust meeting specific requirements and certain tenants in common
Horticultural land is land that is a part of a horticultural unit. It must be actively engaged under a sound management program in the commercial production or growing of:
- fruits or vegetables
- nursery or floral products
The qualifying tract must meet the income requirement for horticultural land. It must consist of at least 5 acres that are in actual production. Land in actual production includes land under improvement.
Horticultural land must produce a minimum gross income of one thousand dollars. This must be maintained yearly. It must have been maintained for three years preceding January 1 of the year for which the benefit gets claimed. Land growing evergreens for Christmas trees must meet minimum gross income requirements. These requirements are established by the Department of Revenue.
Sound management program requirements is a program of production. It is designed to obtain the greatest net return from the land. It must also be consistent with its conservation and long-term improvement.
This is a tax deferred program. The land gets taxed on the basis of the value of the land for its present use. A lien is imposed on the real property of the taxpayer for:
- The difference between the taxes due on the present-use basis and
- the taxes that would have been payable in the absence of this classification. Interest, penalties or costs that accrue are added.
The difference in taxes gets carried forward. This is in the records of the taxing unit or units as deferred taxes. Properties lose their eligibility for deferral as a result of a disqualifying event. If a disqualifying event occurs:
- deferred taxes for the preceding three fiscal years are due and payable
Disqualifying events occurs when the land fails to meet any condition of classification. They can also occur when an application is not approved.
When eligibility is lost, payment for deferred taxes on property are immediately due and payable. This occurs when property loses its eligibility for the deferral program. This loss of eligibility is usually the result of a disqualifying event.