19.1117.01000
Sixty-sixth
Legislative Assembly SENATE BILL NO. 2360
of North Dakota
Introduced by
Senators Dotzenrod, Erbele, Wanzek
Representatives Holman, J. Nelson
1 A BILL for an Act to amend and reenact subdivision b of subsection 15 of section 57-02-08 of
2 the North Dakota Century Code, relating to the calculation of income for purposes of the farm
3 residence property tax exemption; and to provide an effective date.
4 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
5 SECTION 1. AMENDMENT. Subdivision b of subsection 15 of section 57-02-08 of the North
6 Dakota Century Code is amended and reenacted as follows:
7 b. It is the intent of the legislative assembly that this exemption as applied to a
8 residence must be strictly construed and interpreted to exempt only a residence
9 that is situated on a farm and which is occupied or used by a person who is a
10 farmer and that the exemption may not be applied to property which is occupied
11 or used by a person who is not a farmer. For purposes of this subdivision:
12 (1) "Farm" means a single tract or contiguous tracts of agricultural land
13 containing a minimum of ten acres [4.05 hectares] and for which the farmer,
14 actually farming the land or engaged in the raising of livestock or other
15 similar operations normally associated with farming and ranching, has
16 received annual netgross income from farming activities which is
17 fiftysixty-six percent or more of annual netgross income, including netgross
18 income of a spouse if married, during any of the threetwo preceding
19 calendar years.
20 (2) "Farmer" means an individual who normally devotes the major portion of
21 time to the activities of producing products of the soil, with the exception of
22 marijuana grown under chapter 19-24.1; poultry; livestock; or dairy farming
23 in such products' unmanufactured state and has received annual netgross
24 income from farming activities which is fiftysixty-six percent or more of
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Sixty-sixth
Legislative Assembly
1 annual netgross income, including netgross income of a spouse if married,
2 during any of the threetwo preceding calendar years. For purposes of this
3 paragraph, "farmer" includes a:
4 (a) "Beginning farmer", which means an individual who has begun
5 occupancy and operation of a farm within the threetwo preceding
6 calendar years; who normally devotes the major portion of time to the
7 activities of producing products of the soil, poultry, livestock, or dairy
8 farming in such products' unmanufactured state; and who does not
9 have a history of farm income from farm operation for each of the
10 threetwo preceding calendar years.
11 (b) "Retired farmer", which means an individual who is retired because of
12 illness or age and who at the time of retirement owned and occupied
13 as a farmer the residence in which the person lives and for which the
14 exemption is claimed.
15 (c) "Surviving spouse of a farmer", which means the surviving spouse of
16 an individual who is deceased, who at the time of death owned and
17 occupied as a farmer the residence in which the surviving spouse
18 lives and for which the exemption is claimed. The exemption under
19 this subparagraph expires at the end of the fifth taxable year after the
20 taxable year of death of an individual who at the time of death was an
21 active farmer. The exemption under this subparagraph applies for as
22 long as the residence is continuously occupied by the surviving
23 spouse of an individual who at the time of death was a retired farmer.
24 (3) "Gross income" means federal taxable income as computed under the
25 federal Internal Revenue Code.
26 (4) "NetGross income from farming activities" means federal taxable income
27 from those activities as computed for income tax purposes pursuant to
28 chapter 57-38 adjusted to includecultivating the soil or raising agricultural
29 commodities. The term includes the following amounts:
30 (a) The difference between gross sales price less expenses of sale and
31 the amount reported for sales of agricultural products for which the
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Legislative Assembly
1 farmer reported a capital gainIncome from operating a stock, dairy,
2 poultry, bee, fruit, or truck farm.
3 (b) Interest expenses from farming activities which have been deducted
4 in computing taxable incomeIncome from a plantation, ranch, nursery,
5 range, or orchard.
6 (c) Depreciation expenses from farming activities which have been
7 deducted in computing taxable incomeCrop shares for the use of the
8 farmer's land.
9 (d) Gains from sales of draft, breeding, dairy, or sporting livestock.
10 (4) When exemption is claimed under this subdivision for a residence, the
11 assessor may require that the occupant of the residence who it is claimed is
12 a farmer provide to the assessor for the year or years specified by the
13 assessor a written statement in which it is stated that fiftysixty-six percent or
14 more of the netgross income of that occupant, and spouse if married and
15 both spouses occupy the residence, was, or was not, netgross income from
16 farming activities.
17 (5) In addition to any of the provisions of this subsection or any other provision
18 of law, a residence situated on agricultural land is not exempt for the year if
19 it is occupied by an individual engaged in farming who had nonfarm income,
20 including that of a spouse if married, of more than forty thousand dollars
21 during each of the three preceding calendar years. This paragraph does not
22 apply to a retired farmer or a beginning farmer as defined in paragraph 2.
23 (6) For purposes of this section, "livestock" includes "nontraditional livestock"
24 as defined in section 36-01-00.1.
25 (7)(6) A farmer operating a bed and breakfast facility in the farm residence
26 occupied by that farmer is entitled to the exemption under this section for
27 that residence if the farmer and the residence would qualify for exemption
28 under this section except for the use of the residence as a bed and
29 breakfast facility.
30 SECTION 2. EFFECTIVE DATE. This Act is effective for taxable events beginning after
31 December 31, 2018.
Page No. 3 19.1117.01000
Statutes affected: INTRODUCED: 57-02-08
FIRST ENGROSSMENT: 57-02-08
Enrollment: 57-02-08