Bill > H3963

This bill amends existing Massachusetts law regarding estate tax valuation for farms, allowing estates to elect a special valuation method for real property used for farming purposes. Instead of valuing the farm at its fair market value, the estate can choose to value it either according to a specific federal tax code provision (section 2032A of the Code, as it existed on January 1, 1985) or, if the property qualifies as "closely held agricultural land," it can be valued based on assessments set by the farmland valuation advisory commission for the most recent growing season. The bill clarifies that "closely held agricultural land" includes land defined as forest land, land in agricultural or horticultural use, or recreational land also used for farming or agriculture, even if it's not officially classified as such by local assessors. Importantly, if land previously valued under this special provision later ceases to meet the agricultural use criteria, it will be subject to "roll-back taxes," meaning the estate will have to pay back taxes for the current year and the nine preceding years, calculated according to the specific tax provisions for forest land, agricultural land, or recreational land. Any election made for federal estate tax purposes must be consistent with the election made under this state law, and the state tax commissioner is tasked with creating regulations to implement these provisions.