When properties have an agricultural transfer tax liability due upon transfer, a special tax recapture flag is reflected on the account within the Department’s website Real Property Data Search page. In most cases, properties that are identified as being liable for the agricultural transfer tax are currently receiving a preferential agricultural use assessment. Typically an account receiving the preferential agricultural use assessment is also listed as having an agricultural, or "A", land use code (this is not the case in regards to commercial properties).

Property accounts containing land that have formerly received the benefit of the preferential agricultural use assessment may also have an agricultural transfer tax liability due upon transfer. Property accounts where land removed from the preferential agricultural use assessment after June 30, 2019 must be tracked utilizing the "Ag Assessment Removal Date" flag within the database system’s Site & Flag Tab to track the reduction in agricultural transfer tax liability. This flag enables the agricultural transfer tax liability to remain reflected on the account’s Real Property Data Search page according to their scheduled reduction period below. A property’s status change to a market value begins on July 1. Therefore, the reduction percentage used in the calculation of agricultural transfer tax remains in effect until the next full taxable year (changing only on a July 1 date).

When the “Ag Assessment Removal Date” flag is utilized, the amount of land removed from the agricultural use assessment must be entered in the “Ag Assessment Removal Acreage” flag value field. This is to ensure the amount of land liable for agricultural transfer tax is recorded.

Tax Property Article §13-303(c) and COMAR 18.05.01.01 establishes the current method for calculating the reduction in agricultural transfer tax liability for land removed from the agricultural use assessment after June 30, 2019. Land removed from the agriculture use assessment shall have a portion of agricultural transfer tax liability remain in effect until the point in time the account transfers and becomes subject to collection. The “Ag Assessment Removal Date” flag value must contain the date when the agricultural assessment was removed (i.e. the date must be the current date or a prior date; not a future date in time to be sure that the recapture tax is identified on the Department’s website). A reduction in agricultural transfer tax liability is as follows and remains in effect until a point in time that agricultural transfer tax has been paid:

• Prior to upcoming taxable year of market value notice = 100% of ag tax due
• 1st Full Year of taxable Market Value = 75% of ag tax due
• 2nd Full Year of taxable Market Value = 50% of ag tax due
• 3rd Full Year and all future years of Taxable Market Value = 35% of ag tax will be due until a future point in time where a transfer causes for the imposition of the ag tax.

Ag Tax calculations must be done in the database using the Ag Transfer Taxes calculation tool under Details. There is an entry that will determined which calculation method is to be used depending on the date the agricultural use assessment was removed on land being imposed with an agricultural transfer tax.

Note: Accounts falling into the above category and exempt from the imposition of the agricultural transfer tax upon transfer, shall remained flagged with the “Ag Assessment Removal Date” for agriculture transfer tax liability. In the event the property transfers again at another point in time, the account will remain subject to the imposition of agricultural transfer tax since its initial imposition of ag tax was exempt and has never been satisfied.

Tax property Article §13-305(h) prevents any future agricultural transfer tax liability to land that had been previously subject to an agricultural transfer tax payment after July 1, 2019. Once agricultural transfer tax has been paid on total acreage in agricultural use assessment for a parcel, the supervisor must ensure that payment is recorded within the account. This is done by utilizing the “Ag Transfer Tax Paid Date” flag located in the database system’s Sites & Flag Tab. Users are to enter the date of transfer or date of ag tax payment (aka from Ag Violation) within this flag’s value field. If the account had an "Ag Assessment Removal Date" flag, it must be deleted in database upon agricultural transfer tax being satisfied. The “Ag Transfer Tax Paid Date” flag identifies that the total acreage of land within the account is no longer subject to any future agricultural transfer tax liability, thus preventing any future tax liability from being reflected on the Department’s website.

The amount of acreage in which agricultural transfer tax was paid is to be recorded in the “Ag Transfer Tax Paid Acreage” flag value field. This is particularly important in the event the current, or any future ownership were to reapply and be approved to have land placed back into the agricultural use assessment (this land would no longer be subject to any future agricultural transfer tax liability because ag transfer tax had been previously paid).

• If agricultural transfer tax is paid on any amount of acreage less than 100% of acreage on an account in agricultural use assessment, the “Ag Transfer Tax Paid Date” flag must not be used. This flag is only to be used when 100% of acreage receiving an agricultural use assessment has had agricultural transfer tax imposed. However, any time agricultural transfer is paid on any amount of an accounts acreage, the “Ag Transfer Tax Paid Acreage” flag must be updated in the value field with the amount of acreage which has been imposed with agricultural transfer tax to date.

NOTE: Accounts transferring ownership with land currently receiving an agricultural use assessment where agricultural transfer tax had been previously paid on total acreage after July 1, 2019, may not have their deed presented to local office since agricultural transfer tax is no longer liable. The local office must still obtain an agricultural use application from the new ownership for the land to continue to receive the benefit of the agricultural use assessment. The monthly special exception report will identify these accounts so that an application may be obtained. Under this circumstance if the ownership fails to submit their agricultural application or fails to meet the agricultural use requirements it will not result in a violation because no Declaration of Intent was required (as no ag tax was due upon transfer). However, land shall be removed from the preferential agricultural use assessment and the ownership shall be sent a market value notice for the next upcoming taxable year.