Agricultural Special Assessment

The State of South Carolina provides for a landowner to receive a special assessment on land being used for agricultural purposes providing they meet certain requirements (Section 12-43-220).

Definition of Qualifying Agricultural Acreage
Agricultural Real Property shall mean any tract of real property which is used to raise, harvest or store crops, feed, breed or manage livestock, or to produce plants, trees, fowl or animals useful to man, including the preparation of the products raised thereon for man's use and disposed of by marketing or other means. It includes but is not limited to such real property used for agricultural, grazing, horticulture, forestry, dairying and mariculture. An agricultural use classification is granted to real property which is actually used for agricultural purposes. In no event shall real property be classified as agricultural real property when such property is not used for bona fide agricultural purposes.

Factors Considered in Determining Qualifying Agricultural Acreage
All relevant facts must be considered such as:
  • The nature of the terrain. 
  • The density of the marketable product (timber, etc.) on the land. 
  • The past usage of the land. 
  • The marketability of the agricultural product. 
  • Care, cultivation, harvesting and like practices applicable to the product involved, and any implemented plans thereof. (Example: forestry management program, establishment of permanent pasture, planting of orchards, vineyards.) 
  • Property purchased for investment may qualify, if it is actually used for agricultural purposes. Roll-back taxes will be applied when the use changes. (See Roll-back Tax provision below.)
Agricultural Use Value
Agricultural Use Value refers to the appraised value assigned to those acreage tracts of land that
qualified based on bona fide agricultural use of the property.

Requirements for Agricultural Real Property, 12-43-232
If the tract is used to grow timber, the tract must be five acres or more. Tracts of timberland of less than five acres which are contiguous to or are under the same management system as a tract of timberland which meets the minimum acreage requirement are treated as part of the qualifying tract.

Tracts of timberland of less than five acres are eligible to be agricultural real property when they are owned in combination with other tracts of non-timberland agricultural real property that qualify as agricultural real property. Tracts of timberland must be devoted actively to growing trees for commercial use.

For tracts not used to grow timber, the tract must be ten acres or more. Non-timberland tracts of less than ten acres which are contiguous to other such tracts which, when added together, meet the minimum acreage requirements, are treated as a qualifying tract. For purposes of this item only, contiguous tracts include tracts with identical owners of record separated by a dedicated highway, street/ road or separated by any other public way.

Non-timberland tracts not meeting the acreage requirement may qualify as agricultural real property if the person making the application required pursuant to Section 12-43-220(d)(3) earned at least one thousand dollars ($1.000.00) of gross farm income for at least three of the five taxable years preceding the year of the application.

The assessor may require the applicant(s) to give written authorization consistent with privacy
laws allowing the assessor to verify farm income from the Department of Revenue or the Internal Revenue Service and (ii) to provide the Agriculture Stabilization and Conservation Service (ASCS) farm identification number of the tract and allow verification with the ASCS Office.

Non-timberland tracts not meeting the acreage requirement may qualify as agricultural real property if the property has been owned by the current owner or an immediate family member of the current owner for at least ten years ending January 1, 1994 and the property was classified as agricultural real property for tax year 1994. If at least 50% of a parcel of land qualifies as Agricultural Real Property, the entire tract shall be so classified except for land area used for business or residential purposes (other than bona fide agriculture).

Qualification Requirements for Agricultural Use Value
Agricultural real property which is actually used for such purposes shall be taxed on an
assessment equal to:
  • Four percent of its market value for such agricultural purposes for owners or lessees who are individuals or partnerships and certain corporations which do not:
    • Have more than ten shareholders.
    • Have as a shareholder a person (other than an estate) who is not an individual.
    • Have a nonresident alien as a shareholder.
    • Have more than one class of stock.
  • Six percent of its market value for such agricultural purposes for owners or lessees who are corporations, except for certain corporations specified in (A) above [South Carolina Code 12-43-220(d) (1)].
When to File for Agricultural Use Value
The owner of the property or the owner's agent must apply for the special valuation based on agricultural use before the first penalty date for the payment of taxes for the tax year for which the owner first claims eligibility. Example: For tax year 2012, file between January 1, 2012 and January 15, 2013.

Once an initial application for agricultural use value has been qualified, no further application is necessary while the property continues to meet the eligibility requirements of this item. In any year that the ownership changes a new application must be filed by the new owner during the filing period. The owner shall notify the assessor of any change in use within six months of the change. Remember: Failure to file and become qualified means an automatic 6% market value assessment.

Rollback Taxes
When real property receives agricultural use classification, a portion of the taxes are deferred, not eliminated. When real property which is in agricultural use and is being valued, assessed and taxed under the provisions of this article, is applied to another use other than agricultural, it shall be subject to additional taxes, hereinafter referred to as rollback taxes, in the amount equal to the difference, if any, between the taxes payable on the basis of the agricultural use valuation and assessment, and the taxes that would have been paid had the property been taxed at the market value appraisal and 6% assessment ratio. The rollback shall be applied to the property for the current tax year (the year of change in use) and each of the five tax years immediately preceding the year of change in use that the property received the agricultural use classification [South Carolina Code 12-43-220(d) (4)]. The owner of the property on December 31st of the year in which the use changes is liable for the roll-back taxes and it is also that date upon which the lien attaches.

Penalty for Agricultural
12-43-232(5)b) If it is determined that the property for which the certification was made did not meet the requirements to qualify for agricultural use classification at the time the certification was made, the property which is the subject of the certification is denied agricultural use value for the property tax year or years in question and in lieu of the rollback tax, the tax on the property for each tax year in question must be recalculated using fair market value, the appropriate assessment ratio, and the appropriate millage. The penalties provided pursuant to Section 12-45-180 must be added to the balance due. Interest at the rate of one percent a month must be added to the unpaid taxes calculated from the last penalty date.

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