Source: http://taxappeals.state.wy.us/images/docket_no_200589.htm
Timestamp: 2017-03-29 09:12:37
Document Index: 369656326

Matched Legal Cases: ['§ 3', '§ 39', '§ 18', '§ 34', '§ 34', '§ 39', '§ 45', '§ 39', '§ 34', 'art. 15', '§ 11', '§ 39', '§ 39', '§ 39', '§ 3', '§ 39', '§ 39', '§ 39', '§ 3']

A DECISION OF THE FREMONT COUNTY ) Docket No. 2005-89
(Reins Property) )
Gerhardt J. & Lois L. Reins (Respondents or Taxpayers) did not file a response brief or
statement pursuant to the State Board of Equalization’s Briefing Order.
The Fremont County Assessor appeals a decision of the Fremont County Board of
Equalization (County Board). The State Board of Equalization (State Board), comprised of
Alan B. Minier, Chairman, Thomas R. Satterfield, Vice-Chairman, and Thomas D. Roberts,
Board Member, considered the hearing record and decision of the County Board. Petitioner’s
Notice of Appeal was filed with the State Board effective August 18, 2005. Petitioner filed a brief as allowed by the Briefing Order dated October 25, 2005. The Taxpayers did not file
a response brief or statement. Neither party requested oral argument. The Assessor appeals the County Board decision directing her to re-assess the Taxpayers’
purposes. We are unable to discern from the County Board decision whether the four separate statutory
1. Gerhardt and Lois Reins own and reside on 18.5 acres at 2209 North 2nd Street near
Lander, Wyoming. The property was formerly known as Lot 1 of the O’Brien Subdivision
in Fremont County, Wyoming. [County Board Record, Exhibit A, p. 12].
2. Eileen Oakley is the Fremont County Assessor. [County Board Record, Hearing
3. The Assessor sent the Taxpayers an Assessment Schedule listing the total market
value of their property as $459,400, on or about April 25, 2005. Of this total $130,700 was
the value of the Taxpayers’ land at issue in this proceeding. [County Board Record, Exhibit
4. The Taxpayers applied for agricultural status for their property on or about May 5,
2005, using the Fremont County Affidavit for Agricultural Classification 2005 Assessment
Year form. [County Board Record, Exhibit P, pp. 73-77].
5. On May 18, 2005, the Assessor denied the application for agricultural classification
in the Wyoming statutes and rules. The Assessor gave the following reasons:
The land is not being used or employed consistent with the land’s size,
6. The Assessor’s denial letter also informed the Taxpayers they could submit additional
information that may affect their land’s classification to the Assessor’s office. The
Taxpayers were informed they could file a protest with the County Board within 30 days of
the assessment notice if they disagreed with the Assessor’s decision. [County Board Record,
Exhibit P, p. 72].
7. The Taxpayers filed a Statement To Contest 2005 Property Tax Assessment with
attachments on May 25, 2005. [County Board Record, Exhibit 1, pp. 90-111]. 8. The County Board held a hearing on June 27, 2005. [County Board Record, pp. 4,
9. Mr. Reins told the County Board he purchased the tract of land in 1996 for the
purpose of raising crops because he had horses. The Taxpayers built a barn in 2002 and a
shop in 2003. In 2004 they built a residence on the property. [County Board Record,
10. The Taxpayer testified the land was being developed as agriculture. Until last year,
the Taxpayers were absentee landowners. Because they lived in Meeteetse and hired help
to bring the land into production, the Taxpayers’ land was not producing what it was capable
of producing. This year he was living on the property and it looked like the hay crop would
be good. [County Board Record, Hearing Tape].
11. Mr. Reins was protesting the denial of agricultural status under Wyoming Statute Title
39. In his opinion, the land was presently being used for agricultural purposes. [County
12. Mr. Reins told the County Board the land was not part of a subdivision. The
Taxpayers produced their 2004 Federal Income Tax form 1040, Schedule F, showing $2,475
income. Receipts were also produced indicating income of $1,265 from the sale of a mare
and colt and $520 from the sale of 6.5 tons of hay. [County Board Record, Hearing Tape;
Exhibit 1, pp. 97-100].
13. Mr. Reins said additional hay was produced on the property, and he did sell another
12 tons during the last two months. He sold more hay but did not get receipts for those sales. The total amount of hay raised during 2004 season was 32 tons. [County Board Record,
Hearing Tape; Exhibit 1, p. 91].
14. The Taxpayers also use the land to graze eight head of horses. [County Board Record,
Exhibit 1, p. 91]. Mr. Reins informed the County Board he raised and sold a couple of mares
and foals and will continue to do so in the future. He sold mares last year because he was
building the house and did not have time to take care of the horses properly. He also boards
horses in exchange for labor on his property. [County Board Record, Hearing Tape].
market value of the property was determined by using the CAMA (Computer Assisted Mass
Appraisal) system set forth by the Department. [County Board Record, Exhibit B, p. 13]. Only the residential classification of the Taxpayers’ land is in dispute. [County Board
Record, Hearing Tape, Exhibit R, p. 85].
17. The Assessor testified to qualify for agricultural classification a property must meet
the conditions of the statutes and rules that govern agricultural classification. The statutes
conditions. [County Board Record, Hearing Tape; Exhibit I, pp. 40-43].
18. The Assessor told the County Board to meet agricultural classification there were four
appearance of the land. [County Board Record, Hearing Tape; Exhibit R, p. 86].
19. The Assessor must also consider whether the land is part of a platted subdivision. The
Assessor conceded the commissioners had vacated the O’Brien Subdivision but believed the
vacation contravened the intent of the statutes on subdivisions. [County Board Record,
Hearing Tape; Exhibit R, p. 86].
20. The Assessor testified the parcels in the O’Brien Subdivision were required to be
platted at the time they were formed, and these parcels would be required to be platted if they
were formed today. [County Board Record, Hearing Tape; Exhibit K, p. 45; Exhibit R, p.
21. The Assessor testified the owners of the lots waited until the subdivision was fully
developed to begin the process of vacation. These lots were sold as residential lots. The
original restrictive covenants stated the purpose was to insure the use of the property for
animals but the use was regulated by the Architectural Control Committee. [County Board
Record, Exhibit D, pp. 18-23]. The amended covenants filed with the vacation of the
subdivision changed the wording of the original restrictive covenants minimally, adding the
word “agricultural” to the use. In the revised restrictive covenants, the Architectural Control
Committee still controlled the use of the land. [County Board Record, Exhibit F, pp. 28-36].
22. The Assessor told the County Board the statutes and rules require agricultural land be
used or employed primarily in an agricultural operation, where primarily means chiefly or
the first importance. The Taxpayers’ land is defined by its own restrictive covenants as
residential, with animal and agricultural use being limited by the Architectural Control
Committee. [County Board Record, Hearing Tape].
23. The Assessor must also consider whether the owners of the land derived annual gross
revenue of not less than $500. [County Board Record; Exhibit P, p. 75]. The Taxpayers’
IRS Form 1040, Schedule F Profit or Loss From Farming, showed a gross income of $2,475. [County Board Record, Exhibit 1, p. 98]. The Taxpayers’ receipts indicated income of
$1,265 from the sale of a mare and colt and $520 from the sale of 6.5 tons of hay. [County
Board Record, Exhibit P, p. 75].
being limited. Therefore, the Assessor concluded the land’s primary use was residential. The parcel had significant residential improvements as described in the CAMA printouts. [County Board Record; Exhibit B, p. 13].
25. The Assessor told the County Board she applied the Department’s Rules equally and
Exhibit R, pp. 87-88]. She first subtracted two acres from the Taxpayers’ total acreage of
18.5 acres, in order to account for a residential farmstead as required by the Department’s
Record, pp. 40-43; Exhibit R, p. 87]. She then determined a productive capacity for the
remaining 16.5 acres using elements of the methods prescribed by the Department for
valuation of all agricultural lands. [County Board Record, Exhibit R, p. 87].
27. The Assessor used the Lander Area Soil Survey to determine the soil type of the
Taxpayers’ property. [County Board Record, Exhibit R, p. 87; Exhibit J, p. 44]. She
Exhibit R, p. 87; Exhibit J, p. 44; Exhibit K, p. 45].
28. The Assessor determined the productive value of the Taxpayers’ soil type using the
Exhibit M, pp. 47-61]. The Assessor determined: (1) the pertinent Land Resource Area, and
(2) the productive class of the land. [County Board Record, Exhibit R, p. 87; Exhibit M, p.
54]. These numbers were translated into a standard productive range for irrigated crop land,
expressed in tons of hay per acre. [County Board Record, Exhibit R, p. 87; Exhibit M, p. 54]. The resulting range of production for the Taxpayers’ property was from three to four tons per
acre. [County Board Record, Exhibit R, p. 87; Exhibit M, p. 54]. Using the chart identified
Record, Exhibit M, p. 54].
29. The Assessor next multiplied the Taxpayers’ total acreage (exclusive of farmstead),
or 16.5 acres, times the low end of expected production per acre of three tons per acre, to
reach an expected total production of 50 tons of hay. [County Board Record, Exhibit R, p.
87]. She then multiplied this expected total tonnage by a low revenue estimate of $70 per
ton of hay, and rounded down to reach an expected total of $3,500 revenue for the
Taxpayers’ property. [County Board Record, Exhibit R, p. 87]. 30. Finally, the Assessor compared this expected revenue, prepared using low-end
estimates at each step, with the Taxpayers’ actual revenue of $2,475. Supra, ¶ 12. In the
produce. [County Board Record, Exhibit R, pp. 87-88]. 31. The Assessor testified a portion of the Taxpayers’ production may have been used to
a hobby will not be considered agricultural.” If hobby animals were using part of the
production, marketable production would be less than the land’s capability to produce, and
would not be agricultural land. [County Board Record, Hearing Tape; Exhibit I, p. 41].
32. The Assessor reviewed the records of other small acreage parcels between 5 and 20
Hearing Tape; Exhibit N, pp. 63-64; Exhibit O, pp. 65-71].
33. In conclusion, the Assessor told the County Board that while the Taxpayers’ parcel
correctly valued as residential land. [County Board Record, Hearing Tape; Exhibit R, p. 89].
(III) If the land is not leased land, the owner of the land
has derived annual gross revenues of not less than five hundred
(IV) The land has been used or employed, consistent with
the land's size, location and capability to produce as defined by
(1) Experiences an intervening cause of
production failure beyond its control;
(2) Causes a marketing delay for economic
(3) Participates in a bona fide conservation
program, in which case proof by an affidavit showing
qualification in a previous year shall suffice; or
(4) Has planted a crop that will not yield an
income in the tax year.
43. The first statutory requirement to qualify for agricultural valuation is the present use
44. In this case, the Taxpayers testified they produced hay and they presented a receipt
for the sale of 6.5 tons of hay in the amount of $520. The Taxpayers also testified they
grazed eight horses on the property and sold a mare and colt for $1,265. The use of the land
by animals kept as a hobby does not, standing alone, qualify as an agricultural purpose. Rules, Wyoming Department of Revenue, Chapter 10, § 3(a)(i)(B)(II); see Brenda Arnold,
Laramie County Assessor (Steel), Docket No. 96-109, June 13, 1997, 1997 WL 345863
(Wyo. St. Bd. Eq.). The production of hay for sale, however, is an agricultural purpose and
supports a conclusion by the County Board that the Taxpayers met the requirement of Wyo.
Stat. Ann. § 39-13-103(b)(x)(B)(I).
45. The second statutory requirement for agricultural classification is that the land “is not
46. The Taxpayers argued before the County Board that because their property was not
now part of a subdivision, they met this test. Yet the definition provided in the Department’s
Rule is contrary to this interpretation. Instead, the Department’s definition is backward-looking. If we apply the letter of the platted subdivision definition found in the Department’s
Rules in the context of this record, it is undisputed that: (1) the Taxpayers’ property is
identifiable as a unit of land that was created as a lot among other units of land, and part of
a subdivision; (2) the subdivision so created received the approval of the governing body in
whose jurisdiction the property resided at the time of creation; and (3) the creation was
recorded in the records of the county clerk. The Taxpayers’ property fits within the Rule,
and cannot qualify as agricultural if the Rule is literally construed.
47. Stated another way, any modification to the status of the Taxpayers’ property as Lot
1 in the O’Brien Subdivision occurred after the subdivision was created. The Department’s
Rule appears to ignore any such post-creation modification of the platted subdivision status. 48. The Taxpayers’ property is one of eight lots platted as the O’Brien Subdivision
Taxpayers assert the O’Brien Subdivision has been vacated, but the County Board Record
does not contain exhibits supporting the Taxpayers’ assertion [County Board Record,
Exhibit F, pp. 28-36; Exhibit 1, pp. 94-96]. 49. The only Wyoming statute which addresses vacating a subdivision plat is Wyo. Stat.
of lots in such plat joining in the execution of the writing aforesaid. No plat or
portion thereof within the corporate limits of a city or town shall be vacated as
herein provided without the approval of the city or town.
50. While the Wyoming subdivision statutes allow a county to “impose requirements…
which are more restrictive than the provisions of this article,” Wyo. Stat. Ann. § 18-5-315,
such language does not authorize a county commission to in effect negate Wyo. Stat. Ann.
§ 34-12-106. The plain language of Wyo. Stat. Ann. § 34-12-106 does not require a county
commission take any action if a plat is to be vacated under the statute. However, the statute
51. There is some question whether the statute which provides a procedure to vacate a plat
52. When the State Board interprets the language of Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(II), it must reach a reasonable interpretation in light of the purpose and policy
Patrick J. Rohan, Zoning and Land Use Controls, § 45.01[3], p. 45-19 (1978-). 53. While the county commissioners appear to have approved the Taxpayers’ request to
vacate the subdivision, we doubt the purpose of Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(II)
was to enable landowners who subdivided for the purposes of securing government
resources, particularly the location of public roads and access to public roads, to later secure
the substantial property tax benefits of agricultural land status. Even if the O’Brien
Subdivision owners were candid about the purpose for vacating the subdivision, the State
Board concludes the Taxpayers must fully and completely demonstrate compliance with
Wyo. Stat. Ann. § 34-12-106, yet did not do so.
54. The public purpose of ensuring the success of a new development is also at issue in
this record. The vacation of a plat also acts to “divest all public rights in the streets,…laid
who occupy Lot 1, but there is no indication that the owners of Lots 5, 6, 7 and 8 appreciated
the full implications of vacating the subdivision.
55. The parties to this proceeding did not request oral argument, and the Assessor’s brief
conclusions of law it drew. The County Board, the Taxpayers and the Assessor may have
have been created other than by subdivision. The State Board concludes the appropriate
action is to remand the case. The County Board, in its discretion, may wish to take further
evidence from the Taxpayers regarding whether the subdivision was properly vacated.
56. The third requirement to qualify for agricultural valuation is that the owner establish
consists of the Taxpayers’ Federal Income Tax Form 1040 Schedule F, Profit or Loss From
Farming, showing a gross income of approximately $2,475 for Tax Year 2004, and two
receipts, one from the sale of a mare and colt for $1,265, and one from the sale of hay for
$520. It is doubtful whether the County Board could accept the proceeds from sale of the
mare and colt as meeting this requirement, based on the Taxpayers explanation that the mare
and colt were sold because they didn’t have time to properly care for them, an explanation
which implies the horses were a hobby. The amount shown on the receipt for the sale of hay
57. The Wyoming Constitution grants favorable treatment to agricultural and grazing
lands by providing they “shall be valued according to the capability of the land to produce
agricultural products under normal conditions.” Wyo. Const. art. 15 § 11 (b). The statutory
definition of agricultural purpose echoes this language, limiting those purposes to being
“consistent with the land’s capability to produce.” Wyo. Stat. Ann. § 39-13-101 (a)(viii). Land can only qualify for agricultural classification if it meets a fourth and related statutory
58. The pertinent definition of “consistent” is “in agreement or harmony; in accord;
principally employed in other uses, such as residential or those being held for future
residential development, yet generating enough agricultural revenue to meet the minimum
gross revenues standard of Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(III).
59. The statute expressly addresses the problem that “normal conditions” may not prevail
classification, and the minimum gross revenues requirement of Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(III), if it:
Chapter 10, § 3(a)(ii)(A). While the Taxpayers offered an explanation for their failure to
comply with the fourth requirement, being an absentee landowner using hired help, the
Taxpayers failed to offer evidence of any statutorily recognized excuse from compliance with
Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(IV).
60. The Assessor prepared calculations to quantify her view that the Taxpayers did not
acres, which she rounded down to $3,500. Supra, ¶29. This calculation is consistent with
described in detail in other cases arising from Fremont County. E.g., Appeal of Fremont
County Assessor (Dechert Property), Docket No. 2004-125, February 4, 2005, 2005 WL
301141(Wyo. St. Bd. Eq.). Finally, she compared this minimum value against the income
actually reported by the Taxpayers, or $2,475. Supra, ¶ 12. Based on this comparison, she
concluded the Taxpayers had not employed their land consistent with its capability to
produce. Supra, ¶ 30.
61. Based on the evidence presented by the Taxpayers that $1265 of their reported
revenue came from the sale of a mare and a colt, a non agricultural use, the Taxpayers actual
agricultural related income was only $1210. Supra ¶ 56. 62. The Assessor’s calculation may not be the only approach to determining whether the
63. By taking the Assessor’s calculation one step further, one can also estimate the values
Taxpayers’ land are valued at $48,000; four acres are valued at $34,400; and 10.5 acres are
valued at $48,300, for a total land value of $130,700. [County Board Record, Exhibit B, p.
13]. If the Taxpayers were to prevail, their land values would be divided between a two acre
homestead and the remaining 16.5 acres. If we assume that a two acre homestead would
parcels). The remaining 16.5 acres would be valued as Irrigated Land Resource Area 4, class
III. Supra, ¶ 27. The Assessor’s value per acre for that LRA and class was $801 per acre in
2005. [County Board Record, Exhibit M, p. 62]. The value of the agricultural acreage would
accordingly be $13, 216, and the total land value would be $37,216. On these assumptions,
the resulting difference in valuation would be a reduction of $93,484. (By calculation).
64. The related reduction in taxes would be approximately $660.87. The difference in
valuation is multiplied by the tax rate of 9.5%, then by the estimated levy of 74.414 mils. [See County Board Record, Exhibit A, p. 12]. Similar savings would be realized in future
years as long as the lands remained eligible for agricultural classification. 65. The County Board’s Findings of Fact acknowledged the Assessor “argued” the
generally that the Taxpayers met their burdens. [County Board Record, Decision and Order,
p. 10]. We are also uncertain as to whether the County Board understood the statutory
requirement, because the words “consistent with the land’s capability to produce” are not
expressly referenced in the County Board’s decision.
66. While the County Board’s decision appears to be contrary to the undisputed evidence
unable to discern how or why the County Board concluded the Taxpayers met the
(1) specifically acknowledges the requirements of the statute, and (2) if the County Board
concludes the Taxpayers have met the requirements of Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(IV), specifically addresses the evidentiary basis for its conclusions.
67. The County Board’s decision indicates it considered one other issue related to Wyo.
a residential purpose. [County Board Record, p. 9, Findings of Fact, ¶ 4]. On remand, the
State Board concludes the County Board is not obliged to revisit this issue. 68. The “lands in transition” issue arises from the Department’s definition of non-agricultural lands. Supra, ¶ 40. The State Board has previously been reluctant to deny
are in transition. E.g., Matter of Arnola M. Davis, Docket No. 2003-96, February 11, 2004,
2004 WL 364070 (Wyo. St. Bd. Eq.). In this case, the County Board could readily have
determined, in its capacity as finder of fact, that any transition with respect to the Taxpayers’
land had already occurred. We accordingly uphold the County Board’s conclusion on this
69. The Taxpayers referred to their restrictive covenants as a response to the Assessor’s
denial of their request for agricultural classification. [County Board Record, Exhibit 1, p. 91]. Specifically, they argued that the restrictive covenants now prohibit subdivision of their land. While this may be a response to the Assessor’s concern for the lands being in transition, it
does not speak at all to the matter of the capability of the Taxpayers’ lands to produce. If the
70. In their present form, we would be inclined to characterize the restrictive covenants
as maintaining a residential character for the Taxpayers and the seven other properties of the
of livestock which may be kept on any given property. [County Board Record, Exhibit F,
Covenants, Section V, p. 30]. On its face, this provision promotes residential use, restricts
decision how it chose to address the effect of the restrictive covenants. Should the County
Board determine on remand that the Taxpayers have otherwise met the requirements of Wyo.
Stat. Ann. § 39-13-103(b)(x)(B)(IV), we encourage specific findings and conclusions on this
E. Miscellaneous Issue
71. The Taxpayers’ position ignores a provision of Department’s Rules placing an
additional burden on landowners who seek agricultural classification for a parcel of forty
acres or less. Those landowners must provide proof a parcel of that size should be classified
agricultural. Rules, Wyoming Department of Revenue, Chapter 10, § 3(c)(x). This burden
applies whether or not the landowner chooses to appeal an assessor’s determination of
agricultural classification. It requires a landowner to provide proof that each of the four
statutory requirements for agricultural classification have been met.
72. We conclude the the County Board’s Findings of Fact and Conclusions of Law are
Board of Equalization granting the Taxpayer agricultural classification is remanded to the
days of the date of this decision. DATED this day of July, 2006.