Alabama Attorney General Opinion 1979-0044

# THE ATTORNEY GENERAL STATE OF ALABAMA · MONTGOMERY, ALABAMA 36130 CHARLES A. GRADDICK ATTORNEY GENERAL February 1, 1979 File #37 79-00044 Mrs. Ina H. Becker Tax Assessor Baldwin County P. O. Box 451 Bay Minette, Alabama 36507 AD VALOREM - TAX ASSESSOR - EXEMPTION - PRESENT USE The income tax return referred to in Act 48 of the 1978 Special Session is the last federal income tax return filed by the taxpayer. Present use appraisal means appraisal at market value for comparable properties for which the highest and best use is the present use of the subject property. Dear Mrs. Becker: In your letter of December 6, 1978, you ask the following questions: "1) Would a person, who became disabled after January 1, 1978, whose income for 1977 was in excess of 7,500, but who would be eligible for total exemption according to their 1978 income and dis- ability, be ineligible for total exemption for the tax year beginning October 1, 1978, due to their 1977 income? "If they are eligible for total exemption, upon what grounds could I make an exception in their case? "2) During the seminar, I was impressed with the opinion that present use appraisals would be tailored around income from the present use of properties and vague economic feasibility theories resulting in appraised values far below market value of farm properties, even though the present use is for farm purposes. Mrs. Ina H. Becker February 1, 1979 Page 2 "It is my opinion that House Bill 172, Act 135, Section 4, which provides for the consideration of 'replaceability as agri- cultural property', means that farm property presently appraised at a higher best use would be reappraised at market value for comparable farm properties." In answer to your first question, Act 48 of the 1978 Special Session provides that the net annual taxable income as shown on the "latest United States income tax return" (Emphasis supplied) is the standard by which the exemption is determined. Thus, a person disabled after January 1, 1978, whose income on his "last" return (e.g., the return filed April 15, 1978) is in excess of $7,500 is not eligible for the exemption for the tax year beginning October 1, 1978. Similarly, a person who has become 65 years of age (or older) whose income on his latest United States income tax return is greater than $7,500 would not be eligible for the exemption. The term "latest" must be taken to mean "last filed return." Farm property for which the "present use" appraisal is selected by the taxpayer will be appraised at market value for comparable farm properties for which the highest and best use is as agricultural or farm property. I have been informed that the Department of Revenue is to issue regulations on this question. Yours very truly, CHARLES A. GRADDICK Attorney General PHILIP C. DAVIS Assistant Attorney General PCD:mlw