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STATE OF MINNESOTA IN SUPREME COURT A10-1089

Tax Court Frederick Farms, Inc., Relator, vs. County of Olmsted, Respondent. ________________________ Kenneth R. Moen, Rochester, Minnesota, for relator.

Stras, J.

Filed August 10, 2011 Office of Appellate Courts

Mark Ostrem, Olmsted County Attorney, Thomas M. Canan, Senior Assistant County Attorney, Rochester, Minnesota, for respondent. ________________________ SYLLABUS A participant in a joint family farm venture may not claim an agriculturalhomestead classification on land unless the joint family farm venture owns or leases the land. Affirmed. OPINION STRAS, Justice. In 2008, Olmsted County changed the property tax classification of farmland owned by Frederick Farms, Inc., from agricultural-homestead to agricultural1

nonhomestead property. The Minnesota Tax Court denied Frederick Farms' petition to change the classification of the property back to agricultural homestead for taxes payable in 2009 and later. Frederick Farms appealed to this court, arguing that it is operating a joint family farm venture with its sole shareholder, James Frederick, and that the County must classify Frederick Farms' property as agricultural-homestead property because it is used by the joint family farm venture. Because we conclude that a joint family farm venture must own or lease, and not merely use, the property in order for a participant of the joint family farm venture to claim an agricultural-homestead classification, we affirm the decision of the tax court. I. The material facts of this case are undisputed. Frederick Farms owns three

contiguous parcels of land in Olmsted County totaling 300 acres. The only structures on Frederick Farms' parcels are grain bins. The sole shareholder of Frederick Farms, James Frederick, personally owns and resides on two parcels totaling 80 acres that are contiguous with the 300 acres of land owned by Frederick Farms. Mr. Frederick farms the entire 380 acres as a single farm, using farm equipment mostly owned by Frederick Farms and hiring day laborers when necessary. Prior to 2008, Olmsted County classified all of the contiguous parcels owned by Mr. Frederick and by Frederick Farms as agricultural-homestead property for tax purposes. In 2008, the County reclassified the 300 acres owned by Frederick Farms as agricultural-nonhomestead property, which is taxed at a higher rate than agriculturalhomestead property. Compare Minn. Stat.

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Minnesota Law