Legal & Tax Issues
Attorney Francis Di Luna of Murtha Cullina law offices is MFGA’s legal advisor and is a valued asset to the agricultural industry in this state. He is the most recognized legal expert on matters relating to Massachusetts ag. He is associated with the Farm Bureau and several other organizations and is available to the agricultural community for consult and hire. He can be reached at 781-897-4981.
In addition, Amalie Ann George, CPA, PC is MFGA’s tax advisor and is also available for consult and hire. You can reach her at 781-455-0200. UMass Center for Agriculture has some tax information resources for you, whether you are a new or established grower, including links to IRS information. There is also a general federal farm income tax fact sheet on the Penn State Extension website.
1. Where is the legal definition that states floriculture is agriculture in MA?
Horticulture, the growing of flowers, is considered agriculture under the General Laws, MGL 128A.
2. What is the definition of a farm for local real estate tax purposes?
Nothing is simple in state law, so there are several citations that might apply to an operation (or not).
Chapter 61A Sec. 1 defines agriculture for real estate tax purposes.
Chapter 61A Sec. 2 defines horticulture for real estate tax purposes.
Chapter 61 Sec. 1 defines forestland for real estate tax purposes.
3. What other definitions in law might apply for greenhouses or field growing for horticulture?
If not defined as Chapter Land (referring to Chapters 61, 61A Sec 1 or 2 as cited in question 2), there is no other definition except Ch. 128 Sec. 1A (see question 1).
4. How are greenhouses taxed locally? Are they commercial or farming? Can this vary by community?
If the greenhouse is a typical glass or rigid plastic house on a foundation, it is taxed as a commercial building. Period.
The standard tax category of a poly greenhouse, if it meets all of the following, is that it should be taxed as personal property and not real estate. But a poly house may be unique and may be subject to the discretion of the local Building Inspector.
- The poly house is totally enveloped in plastic film.
- The poly house has no sonotubes, foundation or footings.
- The poly house has no walls or attachments of plywood, doors, or other rigid building materials.
- The poly house does not have any rigid poly (even a few feet at the beginning of the greenhouse disqualifies it).
- Poly houses can only be used to grow plants – not to store parts, supplies or equipment.
- Poly houses cannot be used to raise chickens or animals.
If your poly house fits the criteria, it most likely would be taxed as personal property and not real estate. If your poly house fails on one of the above or if you have any question at all, please consult your local Building Inspector.
Please note: Some special considerations regarding poly houses:
Poly houses MUST abide by building setbacks as required locally.
Certain winter uses of poly houses may cause concern for some Building Inspectors. Again, check locally.
5. Is the plant inventory taxable?
This will vary by community. If the inventory is taxed, it should be taxed as inventory not personal property.
6. What authority does the local building inspector have over greenhouse construction?
The Building Code does not provide any specifics for greenhouses uses. This leaves decisions to the discretion of the Building Inspector. On a town-by-town basis, some differences of opinion have been successfully mediated; some have not.
7. Water is getting to be an issue for field-grown products since there is no exemption for agriculture in state law. What can growers do?
Some towns will allow local exemptions for agricultural uses. The Department of Environmental Protection and the Watershed agencies are the ones who drive the over-arching limits placed on municipalities, but each community has its own cap that it must remain within. Local officials may feel they can accommodate the needs of agriculture, and so you must work with the local water supplier.
8. MWRA communities and water charges—can greenhouses get abatements?
The MWRA charges for water use and then charges twice that amount for sewage disposal. Greenhouses typically have an opportunity to ask for abatements since they have limited disposal, but operators must request abatements according to the time schedule outlined by the MWRA. If a grower misses the deadline, s/he will pay the full rate for both. Growers must be timely in requesting an abatement.
9. Is DEP considering requiring water recapture systems inside greenhouses?
There is nothing in place now requiring recapture, but it stands to reason that as conservation efforts grow and gain momentum, this is something that will be explored.
10. What are my liability risks in my greenhouses?
The greenhouse is equivalent to a field – it is where you are growing something and you are inviting the public to enter and pick what they want to buy. Our legal advisor suggests that growers “post” their greenhouses under MGL Ch. 128 Sec 2E.
Here is the language:
WARNING—Under section 2E of chapter 128 of the General Laws the owner, operator, or any employees of this farm, shall not be liable for injury or death of persons, or damage to property, resulting out of the conduct of this “pick-your-own” harvesting activity in the absence of wilful, wanton, or reckless conduct.