§ 3757 — Land use change tax

(a) Land that has been classified as agricultural land or managed forestland pursuant to this chapter shall be subject to a land use change tax upon the development of that land, as defined in section 3752 of this chapter. The tax shall be at the rate of 10 percent of the full fair market value of the changed land determined without regard to the use value appraisal. If changed land is a portion of a parcel, the fair market value of the changed land shall be the fair market value of the changed land as a separate parcel, divided by the common level of appraisal. Such fair market value shall be determined as of the date the land is no longer eligible for use value appraisal. This tax shall be in addition to the annual property tax imposed upon such property. Nothing in this section shall be construed to require payment of an additional land use change tax upon the subsequent development of the same land, nor shall it be construed to require payment of a land use change tax merely because previously eligible land becomes ineligible, provided no development of the land has occurred.
(b) Any owner of eligible land who wishes to withdraw land from use value appraisal shall notify the Director, who shall in turn notify the local assessing official. In the alternative, if the Director determines that development has occurred, the Director shall notify the local assessing official of his or her determination. Thereafter, land that has been withdrawn or developed shall be appraised and listed at its full fair market value in accordance with the provisions of chapter 121 of this title and subsection 3756(d) of this title, according to the appraisal model and land schedule of the municipality.
(c) For the purposes of the land use change tax, the determination of the fair market value of the land shall be made by the local assessing officials in accordance with the provisions of subsection (b) of this section and divided by the municipality’s most recent common level of appraisal as determined by the Director. The determination shall be made within 30 days after the Director notifies the local assessing officials of the date that the owner has petitioned for withdrawal from use value appraisal or that the Director or local assessing official has determined that development has occurred. The local assessing officials shall notify the Director and the owner of their determination, and the provisions for appeal relating to property tax assessments in chapter 131 of this title shall apply.
(d) The land use change tax shall be due and payable by the owner 30 days after the tax notice is mailed to the taxpayer. The tax shall be paid to the Commissioner, who shall remit to the municipality the lesser of one-half the tax paid or $2,000.00. The Director shall deposit three-quarters of the remainder of the tax paid in the Education Fund, and one-quarter of the remainder of the tax paid in the General Fund. The Commissioner shall issue a form to the assessing officials that shall provide for a description of the land developed, the amount of tax payable, and the fair market value of the land at the time of development or withdrawal from use value appraisal. The owner shall fill out the form and shall sign it under the penalty of perjury. After receipt of the completed and signed form, the Commissioner shall furnish the owner with one copy, shall retain one copy, and shall forward one copy to the local assessing officials, one copy to the register of deeds of the municipality in which the land is located, and one copy to the Secretary of Agriculture, Food and Markets if the land is agricultural land and in all other cases to the Commissioner of Forests, Parks and Recreation.
(e) The owner of any classified land receiving use value appraisal under this subchapter shall immediately notify the Director, who in turn shall notify the local assessing officials and the Secretary of Agriculture, Food and Markets if the land is agricultural land, and in all other cases the Commissioner of Forests, Parks and Recreation, of:
(1) The development of the land, as defined in section 3752 of this chapter.
(2) Any change or discontinuance of use of the classified land so that it is no longer eligible for use value appraisal or is eligible for a different use value appraisal under this subchapter.
(3) Any transfer of ownership. A transfer of ownership, alone, will not affect eligibility of the parcel, and no new maps will be required solely because of a transfer, but failure to provide maps, a new application, or transfer information to the Division of Property Valuation and Review within 30 days of a request being sent by certified mail by the Director will result in removal of the parcel from the program.
(f)(1)(A) When the application for use value appraisal of agricultural land and forestland has been approved by the State, the State shall record a notice of contingent lien against the enrolled land in the land records of the municipality.
(B) The landowner shall bear the recording cost.
(C) The notice of contingent lien shall constitute notice to all interested parties that a lien against the enrolled land will be created upon the recording in the land records of a determination that development of that land, as defined in section 3752 of this title, has occurred.
(D) The lien created by the recording of the notice of development shall be for the amount of the land use change tax then due as specified in the notice of development.
(E) A lien recorded in the land records of a municipality under this section on or after April 17, 1978 shall be deemed to be a contingent lien.
(2) The land use change tax and any obligation to repay benefits paid in error shall not constitute a personal debt of the person liable to pay the same but shall constitute a lien that shall run with the land. All of the administrative provisions of chapter 151 of this title, including those relating to collection and enforcement, shall apply to the land use change tax. The Director shall release the lien when notified that:
(A) the land use change tax is paid;
(B) the land use change tax is abated pursuant to this section;
(C) the land use change tax is abated pursuant to subdivision 3201(5) of this title;
(D) the land is exempt from the levy of the land use change tax pursuant to this section and the owner requests release of the lien; or
(E) the land is exempt from the levy of the land use change tax pursuant to this section and the land is developed.
(3) Any fees related to the release of a lien under this subsection shall be the responsibility of the owner of the land subject to the lien.
(g) Upon application, the Commissioner may abate a use change tax levy concerning agricultural land found eligible for use value appraisal under subdivision 3752(1)(A) of this title, in the following cases:
(1) If a disposition of such property resulting in a change of use of it takes place within five years of the initial assessment at use value because of the permanent physical incapacity or death of the individual farmer-owner or farmer-operator of the property.
(2) If a disposition of the property was necessary in order to raise funds to continue the agriculture operation of the seller. In this case, the Commissioner shall consider the financial gain realized by the sale of the land and whether, in respect to that gain, payment of the use change tax would significantly reduce the ability of the seller to continue using the remaining property, or any part thereof, as agricultural land.
(h) Land condemned as a result of eminent domain or sold voluntarily to a condemning authority in anticipation of eminent domain proceedings is exempt from the levy of a land use change tax under this section.
(i) Nothing in this section shall be construed as permitting an owner to engage in the development of land in violation of any conservation restriction in effect on said land.
(j)(1) Land transferred to the U.S. Forest Service is exempt from the levy of a use change tax under this section, provided one of the following applies:
(A) land transferred is eligible for use value appraisal at the time of the transfer;
(B) the transfer is in consideration for the receipt from the U.S. Forest Service of land of approximately equal value, as determined by the Commissioner; or
(C) the landowner has submitted to the Commissioner in writing a binding document that would substitute the land received for the land transferred to the Forest Service, for the purposes of this chapter.
(2) Land acquired by the Green Mountain National Forest for public use is exempt from the levy of a use change tax under this section.
(k) Conservation and preservation rights and interests held by an agency of the United States or by a qualified holder, as defined in 10 V.S.A. chapter 34, shall be exempt from the levy of a use change tax. Upon request of the agency or qualified holder, the Commissioner may petition the Director to release the conservation and preservation rights and interests from any lien recorded pursuant to this chapter.
(l) Land acquired by the Agency of Natural Resources; the Department of Forests, Parks and Recreation; the Department of Fish and Wildlife; or the Department of Environmental Conservation for public uses, as authorized by 10 V.S.A. § 6303(a)(1)-(4), is exempt from the levy of a land use change tax under this section.
(m) Land owned or acquired by a Native American tribe or a nonprofit organization that qualifies for an exemption under subdivision 3802(21) of this title shall be exempt from the levy of a land use change tax under this section. (Added 1977, No. 236 (Adj. Sess.), § 1; amended 1983, No. 19; 1983, No. 241 (Adj. Sess.); 1987, No. 57, § 6, eff. July 1, 1988; 1987, No. 130 (Adj. Sess.), § 3, eff. March 31, 1988; 1989, No. 222 (Adj. Sess.), § 43, eff. May 31, 1990; 1995, No. 29, § 40, eff. April 14, 1995; 1995, No. 178 (Adj. Sess.), § 289; 1997, No. 60, § 61, eff. June 26, 1997; 1999, No. 49, § 85, eff. June 2, 1999; 2001, No. 140 (Adj. Sess.), § 29, eff. June 21, 2002; 2003, No. 68, § 86, eff. June 18, 2003; 2005, No. 14, § 5, eff. July 1, 2006; 2005, No. 14, § 8, eff. May 3, 2005; 2007, No. 190 (Adj. Sess.), § 3, eff. June 6, 2008; 2007, No. 205 (Adj. Sess.), § 3, eff. June 10, 2008; 2011, No. 45, § 13a, eff. May 24, 2011; 2011, No. 143 (Adj. Sess.), § 42, retroactively eff. July 1, 2011; 2013, No. 73, § 14; 2015, No. 57, § 48, eff. Oct. 2, 2015; 2015, No. 57, § 49, eff. July 1, 2016; 2015, No. 134 (Adj. Sess.), § 5, eff. May 25, 2016; 2015, No. 171 (Adj. Sess.), § 20; 2019, No. 20, § 108; 2019, No. 20, § 109, eff. July 1, 2020; 2021, No. 73, § 9, eff. July 1, 2020; 2023, No. 72, § 12, eff. June 19, 2023.)