THESE PROPERTY TAXES ARE ‘FOR THE BIRDS’
By: David Berman, Esq. of Barry L .Miller, P.A., Offices Orlando.
Most people are aware of property tax exemptions, such as homestead exemptions, exemption for certain permanently and totally disabled veterans and for surviving spouses of veterans, and exemptions for surviving spouses of first responders who die in the line of duty. But did you know there are special classifications of land that also allow for property tax exemption? One such classification is for agricultural land.
Under Florida law, lands that are used primarily for bona fide agricultural purposes shall be classified agricultural. The statute on this includes a number of examples of the types of activities whose purpose is agricultural for tax exempt status. The term agricultural purposes includes, but is not limited to: horticulture, floriculture, forestry, dairy, livestock, poultry, bee, aquaculture, sod farming, and all forms of farm products as defined by § 823.14(3), Fla. Stat.
This brings us to the case of McLendon v. Nikolits, 211 So. 3d 92 (Fla. 4th DCA 2017). In this case, the McLendons brought suit against former Palm Beach County Property Appraiser Nikolits for the Property Appraiser’s denial of the McLendons’ request for an agricultural tax classification, and consequently denied the McLendons’ ability to qualify their property for an agricultural exemption.
The McLendons own a five-acre parcel and have used the land to raise wild birds for sale as pets—an activity commonly known as aviculture—since 2006. In furtherance of their business venture, the McLendons spent approximately $50,000.00 for purchase of cages, sheds, fences, feeders, and structures for storage.
From tax year 2006 through 2012, the Property Appraiser granted the McLendons’ property an agricultural tax classification because of its dual uses for aviculture and cattle grazing. However, in 2012, the Property appraiser denied the agricultural tax classification for the requested 4.5 acres and instead issued the classification for only 2.25 acres. The following year, in 2013, the Property Appraiser denied an agricultural tax classification for the part of the McLendons’ parcel devoted to aviculture. The Property Appraiser contended that his office mistakenly classified aviculture as an agricultural purpose for purposes of qualifying the property for an agricultural exemption.
This prompted the McLendons to pursue legal remedies. Although the county’s Value Adjustment Board (“VAB”) reversed the Property Appraiser’s 2013 tax year declassification of the McLendons’ aviculture-related property, the Property Appraiser appealed the VAB’s decision to the circuit court.
The Property Appraiser argued that the tax exemption was limited to those activities listed in the definition of “agricultural purpose” in § 193.461(5), Florida Statutes. The Property Appraiser reasoned that since the Legislature included only “poultry,” and not “aviculture,” in its list of activities that constitute “agricultural purposes,” the Legislature expressed its intent to limit agricultural activities to only those listed in the statute.
The McLendons countered this argument by reasoning that the list of agricultural activities in § 193.461(5), Florida Statutes, was not intended to be an exclusive list because of the phrase “includes, but is not limited to,” preceding the listed activities. The trial court concluded that aviculture was purposefully left out of the statute and entered judgment in favor of the Property Appraiser, the effect of which was that the McLendons lost their agricultural tax classification for 2013.
Under Florida law, “only lands that are used primarily for bona fide agricultural purposes shall be classified agricultural,” for purposes of property taxes. The law includes a number of examples of the types of activities whose purpose is “agricultural” for tax exempt status:
For the purpose of this section, the term ‘agricultural purposes’ includes, but is not limited to, horticulture; floriculture; dairy; livestock…and all forms of farm products as defined in s. 823.14(3) and farm production. Sec. 193.461(5), Fla. Stat.
On appeal, the issue before the court was whether the phrase “but is not limited to” has more than one reasonable interpretation thereby creating an ambiguity. Any ambiguity concerning entitlement to a tax exemption is to be resolved against the taxpayer. Therefore, it was critical for the statute to be deemed unambiguous in order for the McLendons to preserve their “agricultural” classification and exemption.
After considering related case law, the court held that the phrase “include, but are not limited to” is inherently plain and unambiguous and stated that the clear legislative intent was that “the categories listed…are not exhaustive.” The Legislature’s use of a similar phrase was meant to convey that the list of examples of the types of activities whose purpose is “agricultural” is not exhaustive, and the statute was not ambiguous.
The term “farm product” as listed in § 193.461(5), Fla. Stat., is defined by § 823.14(3), Fla. Stat., as “any…animal…useful to humans.” Although aviculture is not explicitly listed in either statute, “animals useful to humans” being a “farm product” authorizes the agricultural exemption, if the McLendons are able to establish that aviculture serves a function useful to humans. In support of their argument, the McLendons provided affidavits of an aviculture expert and a veterinarian who opined that aviculture is useful to humans for multiple reasons including companionship, concern for endangered species, entertainment, education, and scientific purposes.
Based on this evidence, and no rebuttal from the Property Appraiser, the court concluded that at the very least the McLendons’ birds are “useful to humans” as entertainment and companions and, therefore, constitute a farm product as that term is used in §§ 193.461(5), 823.14(3), Fla. Stat. Hence, the McLendons’ property qualified for an agricultural tax exemption for the part of their parcel used for aviculture.
Barry Miller Law is familiar with all aspects of real property taxes. If you, or someone you know, has legal questions concerning real estate, contact Barry Miller Law for assistance at 407-423-1700 or email us at [email protected] for a free consultation.