What Makes Land Agricultural for Taxes in Wisconsin?
Ever wonder what it takes for land to be considered and taxed as “agricultural land”? In State ex rel. Peter Odgen Family Trust of 2008 v. Bd. of Review, 2019 WI 23, the Wisconsin Supreme Court recently held that a “business purpose is not required in order for land to be classified as ‘agricultural land’ for property tax purposes.” This is an important clarification as the Town of Delafield Assessor had revised an assessment of land owned by the Peter Odgen Family Trust of 2008 (“Odgen Trust”) from “agricultural land” and “agricultural forest land” to “residential” resulting in a difference in assessed value of over $850,000. Needless to say, the Odgen Trust faced a highly increased property tax burden which led to the Odgen Trust filing a lawsuit in an effort to reverse the classification.
The Wisconsin Supreme Court carefully reviewed the Wisconsin laws that define “agricultural land” and “agricultural use.” When courts review statutes, if the statutory language is clear, then no further interpretation is necessary. The Court determined that the statutes were clear. Under Wis. Stat. § 70.32(2)(c)1g. “agricultural land” means “land, exclusive of buildings and improvements and the land necessary for their location and convenience, that is devoted primarily to agricultural use.” The Court reviewed several statutes and tax code regulations regarding the definition of “agricultural use.” In short, “agricultural use” plainly includes the growing of Christmas trees, apples, and hay, all of which the Odgen Trust was growing on its property.
What none of the statutes or tax code regulations require is the marketing, selling, or profiting from growing crops. All that is required under the statutes and tax code regulations is the growing of the relevant crops. “A business purpose is not required in order for land to be classified as ‘agricultural land’ for property tax purposes.” To require a business purpose, the court would have to “impermissibly insert such a limitation into a clear and unambiguous set of statutory provisions and administrative rules.”
Presently, if you are a hobby farmer and your land is zoned as “agricultural land” or as “agricultural forest land,” you are likely meeting the definition of “agricultural use.” Moreover, the local assessor cannot require that you sell crops in order to keep such assessment classification. In the simplest terms, whether or not you are producing crops for sale, growing crops or woody products will qualify for an agricultural classification. However, what we should be keeping an eye out for is any legislative changes. If the Wisconsin Legislature is unhappy with this result, the Legislature could choose to amend the statutes to require a business purpose. Municipalities could view this loss of tax revenue significant and could request the Legislature to amend the statutes. While we cannot predict the future, the Legislature’s role is to make and amend laws. The results of this case could be something that the Legislature feels is important to address to keep tax revenues as high as possible since the municipalities rely on tax revenues for their budgets. Understanding what qualifies as “agricultural land” or “agricultural forest land” can be important when an alternative classification can create a significantly higher property tax burden.
 Wis. Admin. Code DOR § Tax 18.05(1)(c).
 Wis. Admin. Code DOR § Tax 18.05(1)(a); Office of Mgmt. & Budget, Exec. Office of the President, North American Industry Classification System (NAICS), United States, 1997, at 86, 90, https://www.census.gov/eos/www/naics/2017NAICS/2017_NAICS_Manual.pdf
 State ex rel. Peter Odgen Family Trust of 2008, 2019 WI at ¶¶ 10-11.
 Id. at ¶ 31.
 Id. at ¶ 32.