Counties Tax Hoop Houses as Real Property
Monday, February 4, 2013
Posted by: Gregg Robertson
PLNA Seeks Legislative Fix
HARRISBURG - A disturbing trend to tax hoop houses as real property seems to be gaining momentum among counties. PLNA member Fairview Evergreen Nurseries in Erie County found their tax assessment jump when they installed new hoop houses for their container operation.
Generally, hoop houses, high tunnels, poly houses, or whatever you call yours, have been viewed as temporary structures not subject to property taxes.
One of the original developers of high tunnel technology, Dr. Bill Lamont at Penn State, said that when they first developed the science and began promoting the use of high tunnels in the 1990’s they thought that taxation wouldn’t be an issue. In an e-mail to PLNA president Gregg Robertson, Lamont said:
In our experience, high tunnels are non-permanent structures and have been treated as such by taxing authorities. New Hampshire actually passed at state law to that effect when high tunnels were first beginning up in that state. We considered it here in Pennsylvania when we first began working on high tunnels in 1998 but didn't feel we needed it.
But all that is changing.
In 2006, there was a decision handed down by Commonwealth Court that held that the plastic covered structures were real property and subject to taxation in Custer v. Bedford County Board of Assessment Appeals.
In this case, a nursery had high tunnels used for plant propagation and growing on. The court found that the hoop house was a fixture and a permanent improvement, even though the hoop house could be moved.
The Custer case was not widely known, but if Erie County is successful in assessing Fairview’s high tunnels as real estate, then news will travel fast among other county assessment offices. County budgets are stressed and counties are looking under every stone to raise revenues without raising millage rates.
PLNA has been successful in raising the alarm with the Department of Agriculture (PDA) and other agricultural groups. The use of high tunnels has become widespread in Pennsylvania agriculture due to their ability to extend the growing season and their reasonable cost.
Brian Snyder of the Pennsylvania Sustainable Agriculture Association (PASA) said, "Property tax alone could cancel out any financial benefit of using the structures at all!”
Farmers use high tunnels for everything from growing tomatoes to housing animals.
With the assistance of Mike Pechart, Executive Deputy Secretary of PDA, Senator Elder Vogel (R-Beaver Co.), chairman of the Senate Agriculture and Rural affairs Committee has agreed to sponsor a bill that would clarify the temporary nature of high tunnels for taxing purposes. Senators Vogel and Pileggi are circulating a memo to draw other sponsors to the bill.
The Pennsylvania State Council of Farm Organizations (PSCFO) is taking up the high tunnel issue at its meeting on February 5. The PSFCO is a broad-based agricultural organization that includes the Pennsylvania Farm Bureau, the Pennsylvania Grange, PLNA and other of Pennsylvania’s most influential agricultural organizations.
PLNA urges members to call their state senator and ask them to co-sponsor Senator Vogel’s bill on high tunnels.