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In Welby Gardens Co. v. County, The Colorado Court of Appeals ruled that property supporting greenhouses, where products are grown in fully enclosed, environmentally controlled buildings, is not a "farm" property for purposes of ad valorem taxation.

The Colorado Court of Appeals ruled that property supporting greenhouses, where products are grown in fully enclosed, environmentally controlled buildings, is not a "farm" property for purposes of ad valorem taxation.

The property at issue consisted of two parcels of land that were used primarily for greenhouses and greenhouse support buildings. The taxpayer, Welby Gardens Company, produced vegetables, flowers, and fruiting plant starts. Most of the products were grown in containers in the greenhouses; however, Welby also had a test field of about three acres in which plants were grown in the ground. The environment of the greenhouses was regulated using water systems, humidity pads, fans, and heaters. In the tax year 1999, the county assessor classified and valued the property as commercial land and improvements. Welby appealed to the Board of Assessment Appeals, which classified the property as agricultural. The county appealed.

The appellate court said that agricultural land in Colorado receives favorable ad valorem tax treatment calculated on the basis of the earning or productive capacity of the land. The court pointed out that for agricultural purposes, a "farm" is land that is used to produce agricultural products that originate from the land's productivity. The court said that there must be some relationship between the agricultural products and the productive capacity of the parcel of land for it to qualify as agricultural land. Here, the court said, the land served only to provide a site for a greenhouse operation; the products involved do not originate from the productivity of the land on which the greenhouses are located. Thus, the court found that the land was not a farm and could not be classified and valued as agricultural for property tax purposes. The order of the Board of Assessment Appeals was reversed.

Welby Gardens Co. v. County

Colorado Court of Appeals

January 3, 2002

As Modified on Denial of Rehearing

May 23, 2002

Certiorari Granted

October 28, 2002

(AJ/10/A.-$10)