High court upholds big property tax break for Lake Country home owner
In a case closely watched by local governments, the Wisconsin Supreme Court on Thursday upheld a huge tax break for a Lake Country homeowner who planted trees in his backyard.
The court affirmed a Court of Appeals ruling that simply planting trees or hay qualified Peter Ogden for an agricultural classification on two lots abutting his Pewaukee Lake home, whether or not there was any business or commercial purpose to the operation.
If the 12-acres behind his lakeside home is classified as agricultural, the assessed value is less than $20,000; as residential property, it was assessed at $887,000 in 2016 by the Town of Delafield.
Ogden is president of Milwaukee-based Ogden & Co., which manages apartments, condos and commercial buildings in southeastern Wisconsin and Arizona. He and his wife own three parcels in the Town of Delafield that had all been residential.
The town's assessor reclassified two of them to agriculture and agricultural forest in 2012 after Ogden said he was starting a tree farm, but changed it back in 2016 after developing doubts about whether Ogden was really pursuing any kind of business.
Ogden appealed the reclassification, arguing that it would take time for the pine trees he planted to grow large enough to sell as Christmas trees and for the apple trees to bear much fruit. In the meantime, he said, he let a farmer grow alfalfa on the property.
The board of review and a circuit judge sided with the town, but the Court of Appeals ruled last year that the law states merely that land "devoted primarily to agricultural use" shall be classified as agricultural.
"Of great import to this case," Judge Mark Gundrum wrote, "the plain language of the statute and rule refers to 'growing' the relevant crops — here apples, hay, and Christmas trees — not marketing, selling, or profiting from them."
The Board of Review didn't dispute Ogden was growing things but wrongly decided, according to the court, that growing alone didn't make the land primarily devoted to agriculture without some related "minimal sales" or "valid economic activity."
Writing for the majority, Justice Shirley Abrahamson said the case was a simple one of statutory interpretation.
"No statute, administrative rule, or case law supports a business purpose requirement for the 'agricultural land' property tax classification," she wrote.
"Therefore, we remand the cause to the circuit court with instructions that the circuit court order the Board: (1) to overturn the Assessor's assessment and classify the appropriate portions of the two lots as 'agricultural land' and 'agricultural forest land'; and (2) to affix a valuation to the two lots."
Justice Rebecca Dallet wrote separately to say she agreed the Board of Review erred when it concluded there must be a business purpose to Ogden's agricultural pursuit. But she and Justice Ann Bradley, who joined the concurring opinion, disagreed that the high court could declare the land agricultural as a matter of law.
Instead, the town's board of review must reassess the property and make its own determination — now guided by the court's decision that no business purpose is required — of whether the land qualifies as agricultural, and what the assessed value should be.
Local governments feared cases like Ogden's from the get-go.
Curt Witynski, deputy director of the League of Wisconsin Municipalities, said after the Court of Appeals ruling that the group warned about just such consequences when the Legislature first considered the ag classification about 12 years ago.
"We opposed the law for the exact reasons the Town of Delafield was struggling with here," Witynski said. "Maybe this will put the spotlight back on the issue and force the Legislature to re-examine it."
Contact Bruce Vielmetti at (414) 224-2187 or firstname.lastname@example.org. Follow him on Twitter at @ProofHearsay.