from the Arizona Tax Court No. TX2013-000321 The Honorable
Christopher T. Whitten, Judge
Mooney, Wright & Moore, PLLC, Mesa By Paul Moore, Jim L.
Wright Counsel for Plaintiffs/Appellees
County Attorney's Office, Florence By Christopher C.
Keller, Cedric I. Hay Helm, Livesay & Worthington, Ltd,
Tempe By Roberta S. Livesay Co-Counsel for
Kent E. Cattani delivered the opinion of the Court, in which
Presiding Judge David D. Weinzweig and Judge James P. Beene
This tax appeal involves approximately 2, 000 acres of cattle
grazing land in Pinal County (the "Property") owned
by 100 Val Vista/Montgomery LLC, et al. (collectively,
"Appellees"). The tax court entered judgment
requiring Pinal County to classify the Property as
agricultural for the 2014 tax year. The County appealed,
challenging whether Appellees satisfied the statutory
requirements for such classification, including that there be
a reasonable expectation of operating profit from the
agricultural use of the property. Ariz. Rev. Stat.
("A.R.S.") § 42-12152(A)(2). We hold that a
taxpayer's submission of an affidavit as authorized by
A.R.S. § 42-12152(C) conclusively establishes the
reasonable expectation of operating profit requirement, and
because Appellees filed the requisite affidavit, we affirm
the tax court's ruling granting Appellees' motion for
partial summary judgment as to that issue. We further affirm
the tax court's rulings that Appellees satisfied the
remaining requirements for agricultural land classification,
including the court's findings after trial regarding the
Property's functional contribution to an overall ranching
operation and the economic feasibility of the ranching
AND PROCEDURAL BACKGROUND
During the relevant tax periods, Appellees leased the
Property to cattle rancher Charles Bush and his company
Rancho Asueno, a ranching operation composed of multiple
noncontiguous parcels of land throughout Pinal County. As
part of the lease, Appellees allowed Bush and Rancho Asueno
to run cattle on the Property. Bush also oversaw the
Property, including maintaining fencing, ensuring sufficient
forage and water for livestock, moving cattle, and monitoring
traffic on the land.
For the 2014 tax year, the county assessor classified the
Property as vacant land, and the State Board of Equalization
upheld the classification. Appellees appealed that
determination to the tax court, and after a bench trial, the
court reversed, ordering the County to classify the Property
Under A.R.S. §§ 42-12151 to -12152, as relevant
here, to be classified as agricultural property for tax
purposes, land used for grazing must meet four criteria.
First, the grazing land must have a minimum carrying capacity
of 40 animal units and contain an economically feasible
number of animal units. A.R.S. § 42-12151(3). Second,
the primary use of the property must be agricultural grazing
and the property must have been in active production
according to generally accepted range management practices
for three out of the five previous years. A.R.S. §
42-12152(A)(1). Third, the property must have a reasonable
expectation of operating profit from its agricultural use.
A.R.S. § 42-12152(A)(2). And fourth, property consisting
of noncontiguous parcels must be managed and operated on a
unitary basis, with each parcel making a functional
contribution to the agricultural use of the property. A.R.S.
Reasonable Expectation of Operating Profit.
Before trial, the tax court granted Appellees' motion for
partial summary judgment regarding the third requirement
(reasonable expectation of operating profit) after Appellees
filed an affidavit attesting that the Property was
"actively producing with an expectation of profit."
The County challenges that ruling. We review the grant of a
motion for partial summary judgment de novo, see Cramer
v. Starr, 240 Ariz. 4, 7, ¶ 8 (2016), viewing the
evidence in the light most favorable to the County, the
non-moving party. See Rasor v. Nw. Hosp., LLC, 243
Ariz. 160, 163, ¶ 11 (2017).
In 2012, the Legislature added subsection (C) to §
42-12152 to provide that the reasonable expectation of profit
requirement "shall be satisfied if the owner
files with the assessor an affidavit of agricultural use,
signed by the owner attesting that all information in the
affidavit is true and the property is actively producing with
an expectation of profit." ...