OIA Legal Center just won a significant victory for Oregon farmers,
ranchers, and rural property owners. Last week, the Oregon Tax Court
reversed the Tax Court Magistrate and Jackson County and rejected
arguments by the Oregon Attorney General that would have wiped out the
Oregon farm tax program as we know it.
The case arose when the
Jackson County tax assessor disqualified 20 acres of property owned by
Leroy and Nancy Wehde from farm tax deferral. The Wehde's lease their
EFU zoned property to a beekeeper who uses the property for keeping his
hives and forage for the bees.
According to the County, the Wehde
property was not used for farm use, and therefore must be disqualified.
We were contacted by the beekeeper and agreed to represent the Wehdes
because of the dangerous and potentially devastating arguments raised by
the Oregon Attorney General's Office in defense of Jackson County.
At trial, the Attorney General made a series of arguments that can only
be considered to be stunning. First, the Attorney General argued that
property must be cultivated in order to be considered to be in "farm
use" and thus qualify for farm tax deferral. Tell that to an Eastern
In this case, the Wehde property was left in
its natural state, because, as our expert witness pointed out, bees
much prefer a property with a variety of different plants to pollinate
and forage rather than land planted in a single crop. Although the
property did not have the appearance of a traditional farm, it provided
excellent habitat for bees. The Tax Court quickly rejected the AG's
But, unfortunately, we've just begun. The AG next
argued that even if the Wehde property was currently in farm use, it
should still be disqualified because the property was "underutilized,"
meaning there was some better type of farm use for the property.
Imagine the mischief that would result from the AG's interpretation. A
farmer growing corn, for example, could face disqualification if the
County Tax Assessor believe that growing wheat was a more valuable use
of the property. Did the legislature really intend to have county tax
assessors telling farmers what kind of farming to do in order to qualify
for farm tax deferral?
The Tax Court made short work of that
argument as well, finding that the Oregon Tax Department rules that the
AG relied on did not apply to EFU zoned properties.
worse. Next, the AG argued that the Wehde property was not in "farm
use" because the beekeeping was not the "primary" use of the property
and because the property was not being used "exclusively" for farm use.
The Wehde's allowed their daughter to run two cows on the property to
graze, with no intent to sell the cows. According to the AG, the fact
that the property was used to graze two cows that weren't for sale
disqualified the property, as it was no longer used "exclusively" for
Imagine if that argument was true - nearly every Oregon
farmer and rancher would lose farm tax deferral, as nearly every Oregon
farm and ranch maintains uses that aren't "farm uses." A rancher
leasing hunting rights to the ranch - disqualified. A farmer hosting
the annual church picnic on the farm - disqualified. A farmer with a
farm stand on the property - disqualified. You get the picture.
It didn't take the Tax Court long to see through the mischief that would
result from this interpretation. The Court correctly found that as
long as the "farm use" of the property was the primary use, other
secondary, non-farm uses would not disqualify the property from tax
Which brings us to the last of the AG's arguments
Oregon law defines "farm use" to include the "feeding, breeding,
management, or sale" of bees or livestock. This definition is obviously
key for beekeepers and ranchers. The AG argued that in order for a
beekeeper or rancher to qualify for farm tax deferral, they had to
demonstrate that they were engaged in all four activities (feeding,
breeding, management, and sale) on each acre of land. Holy crap!
If the AG's argument was accepted, ranchers and beekeepers would face
an impossible test to qualify for farm tax deferral. While livestock
are sometimes "sold" on site, that is not always the case, and it is
never the case that a rancher or beekeeper would use every single acre
of the ranch/farm to engage in all four activities. This argument would
kill farm tax deferral for ranchers and beekeepers.
the Tax Court connected the dots, and held that a rancher or beekeeper
need not engage in all four activities in order to qualify for farm tax
deferral, as long as the ranch or farm was used for at least one of the
This case is a complete victory for the Wehde's,
but an ever bigger win for Oregon agriculture. Had Jackson County and
the Oregon AG prevailed, farm tax deferral in Oregon would have been