The Colorado Division of Property Taxation is asking Montezuma County to explain why it approved a blanket tax abatement for farmers in July.
Property taxes on agricultural land dramatically increased after assessed valuations jumped significantly from 2014.
At a July 20 county Board of Equalization hearing, local farmers protested that the increase in land valuations in some cases more than doubled.
Dismayed by the increase, the commissioners agreed to cap the increased valuations at 22 percent in their role as appeals board for tax protests. The number coincides with increased values for similar agricultural land in La Plata County.
The adjustment by the county reduces subclass land values mandated by the state by 92 percent for flood irrigated land, 86.6 percent for sprinkler irrigated land, and 65.2 percent for dry farmland.
Such adjustments in local land valuations by the county that are greater than five percent get reviewed by the State Board of Equalization (SBOE).
In a Sept. 16 letter to the commissioners, Colorado Property Tax Administrator JoAnn Groff asked for an explanation.
“Please provide support for why the ‘blanket abatement’ applied to these three subclasses produces values that are in compliance with the law and the valuation procedures required to be used by Montezuma County,” the letter asked, with a deadline of Sept. 30.
County commissioners said they want to challenge the state assessment, and believe the way agricultural land is valued by the state is unfairly weighted by areas that have higher production and crop value than Montezuma County.
“We need a taxing formula that makes it fair,” said commissioner Larry Don Suckla.
“There is no way in our minds we can justify that much of an increase,” added commissioner Keenan Ertel. “Here a farmer has a 168 percent increase in their property (value) when their commodity has gone down.”
Agricultural land valuations are set by the state based in part on a 10-year average of crop production values. Whether the county has the statutory authority to reduce the valuations by that amount is unclear.
“These values knocked us over when they came in,” said Montezuma County Assessor Scott Davis.
The SBOE will review the county’s changes at their upcoming meeting to be held Oct. 8 in Denver. County officials along with attorney John Baxter plan to attend the meeting, and provide justification for the tax abatement.