A town of Delafield property owner got a big tax break on Thursday when the state Supreme Court ruled that his land should be classified as agricultural instead of residential.
The opinion, written by Justice Shirley Abrahamson, could lower Peter Odgen’s Waukesha County property assessment by a factor of 52. It was assessed at $886,000 as a residential property in 2016, but was assessed at $17,100 the year before as an agricultural property.
The case has gotten the attention of municipalities in the state concerned that landowners can grow crops with the purpose of avoiding their fair share of property taxes.
Officials with the League of Wisconsin Municipalities weren’t available for comment on Thursday, but the group decried the appellate ruling a year ago that threw out the residential assessment.
The case concerns two town of Delafield parcels owned by Ogden, who is president of Ogden & Co., a Milwaukee-based real estate operation that maintains and invests in properties in Wisconsin and Arizona, and his wife, Therese Mahoney-Ogden. An adjoining residential parcel contains their home.
On the two properties, 4.6 acres and 7.76 acres, the Ogdens planted apple trees and Christmas trees and let a neighbor grow hay on a portion of one lot.
Between 2012 and 2016, the two parcels were classified as agricultural land. But in 2016 the town’s assessor determined that because the Ogdens weren’t making money on the agricultural endeavors, the land should be deemed residential.
Ogden appealed the assessment and the town Board of Review split 2-2, letting the assessment stand. A Waukesha Circuit Court Judge upheld the assessment, but it was later overturned on appeal. The Supreme Court affirmed the Appeals Court ruling.
“We agree with the court of appeals that a business purpose is not required in order for land to be classified as ‘agricultural land’ for property tax purposes,” Abrahamson wrote.
According to a story in the Milwaukee Journal Sentinel after the appellate decision, Ogden contended that his Christmas trees were not yet big enough to sell, and that his apple orchard was too young to produce a marketable harvest.
The assessor, Judson Schultz, told the board he questioned “whether this tree farm was being done actually for agricultural reasons, to generate a profit for business, or was it being done to obtain significant property tax savings.”
“It seems to be an effort to make it look like a business,” he said.
But Abrahamson noted that the hay field and the apple and Christmas trees, staked out in orderly rows, constituted an agricultural use. And nothing in the law requires a business use for an agricultural classification.
“No statute, administrative rule, or case law supports a business purpose requirement for the ‘agricultural land’ property tax classification,” Abrahamson wrote.
Department of Revenue rules, however, specifically include growing apples, hay and Christmas trees as uses that would constitute agricultural use.
The justices were unanimous in determining that the assessor didn’t properly apply state law. Justices Ann Walsh Bradley and Rebecca Dallet issued a concurring opinion contending that the high court doesn’t have the authority to determine the classification of a property, and instead should have remanded the case back to the Circuit Court to direct the Board of Review to reassess the property.