Removal from Farm & Ag and Compensating Taxes

How can the owner remove land from Farm & Agricultural classification?

1. The owner chooses to remove the land and the owner notifies the Assessor in writing.
  • If intending to withdraw all or a portion of the land from classification after 10 years of classification, the owner must give the Assessor a 2-year prior notice. This notice can be filed after the 8th assessment year of the initial 10-year classification period.
  • Notice to the Assessor is provided by completing the "Notice of Request to Withdraw Current Use Assessment Classification (Two Year Notice)" 64 0027 (download, fill-in)
2. The owner sells or transfers the land to an ownership that makes the land exempt from ad valorem taxation.

3. The owner sells or transfers the land to a new owner and the new owner does not sign a notice of forest land continuance.

How can the Assessor remove land from Farm & Ag classification?

The Assessor determines, after giving the owner written notice and an opportunity to be heard, that the land is no longer primarily used for and devoted to commercial farming activity.

When is Removal of Land not Subject to Compensating Tax?

The additional tax, applicable interest, and penalty shall not be imposed if the removal of classification results solely from: 

  1. Land is transferred to a government entity in exchange for other land located in the State of Washington,
  2. Land taken through the exercise of the power of eminent domain, or sale of transferred in anticipation of the exercise of such power was received in writing or by other official action,
  3. A natural disaster changes the use of such land,
  4. Official action by the state, county, or city disallows the present use of such land, 
  5. Transfer of land to a church when such land would qualify for exemptions granted thereto, 
  6. Acquisition of property interests by state agencies or agencies or organizations qualified under RCW 84.34.210 and 64.04.130 (See RCW 84.34.108(5f)),
  7. Removal of land classified as farm and agricultural land on which housing for employees and/or principal place of residence is sited, or 
  8. The sale or transfer of land within two years after the death of the owner of at least a fifty percent interest in the land if the land has been assessed and valued as classified under this chapter continuously since 1993.

Compensating Tax

Upon removal, you will be required to pay compensating tax unless the removal meets one of the exceptions outlined in RCW 84.33.140(13) or (14).

  1. Land Classified for a Minimum of 10 Years: The amount of compensating tax is the difference between the tax levied in the current use value and the tax that would have been levied on the true and fair value plus interest at the same statutory rate charged on delinquent property taxes for the last 7 years.
  2. Land Classified less than the Minimum 10-year Period: Land whose classification is removed due to a change to a nonconforming use, or whose classification is removed prior to the minimum 10-year period, shall be liable to pay the additional tax and interest described above in item 1, plus a penalty equal to 20% of the sum of the additional tax and interest. The additional tax, interest and penalty shall be paid for a maximum of 7 years.