Request By:
Mr. Aubrey R. Mooney
Webster County Attorney
Dixon, Kentucky 42409
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Alex W. Rose, Assistant Attorney General
This is in response to your letter of August 4, 1982 in which you requested an opinion from this office as to whether KRS 132.200(6) precludes the county property valuation administrator from placing a farmer's own grain, stored in his bins or delivered for sale to a grain elevator, upon the property tax rolls.
The classes of property enumeratedd in KRS 132.200 are subject to ad valorem taxation for state purposes only unless that section specifically provides otherwise. KRS 132.200(6) provides as follows:
"All property subject to taxation for state purposes shall also be subject to taxation in the county, city, school or other taxing district in which it has a taxable situs, except the classes of property described in KRS 132.030 and 132.050, and the following classes of property, which shall be subject to taxation for state purposes only:
* * *
(6) Unmanufactured agricultural products (except that the same shall be exempt from taxation for state purposes to the extent of the value, or amount, of any unpaid nonrecourse loans thereon granted by the United States government or any agency thereof), and except that cities and counties may each impose an ad valorem tax of not exceeding one and one-half cents (1 1/2 ) on each one hundred dollars ($100) of the fair cash value of all unmanufactured tobacco and not exceeding four and one-half cents (4 1/2 ) on each one hundred dollars ($100) of the fair cash value of all other unmanufactured agricultural products, subject to taxation within their limits that are not actually on hand at the plants of manufacturing concerns for the purpose of manufacture, nor in the hands of the producer or any agent of the producer to whom the products have been conveyed or assigned for the purpose of sale; . . ." (Emphasis added)
Unless unmanufactured agricultural products satisfy the criteria contained in the "exception" language of KRS 132.200(6) they are not subject to city and county ad valorem taxes.
The key phrase in determining the application of KRS 132.200(6) to a farmer's own grain stored in his bins or delivered for sale to a grain elevator is ". . . nor in the hands of the producer or any agent of the producer to whom the products have been conveyed or assigned for the purpose of sale. " (Emphasis added) Webster defines "producer, " in pertinent part, as "one who grows agricultural products or manufactures crude material into articles of use - compare consumer." (Emphasis added) Therefore, if the language of the statute is given its ordinary meaning, as required by KRS 446.080(4), grain that is in the possession of the farmer who grew it or in the possession of an agent of the farmer for the purpose of sale is subject to ad valorem taxation for state purposes only.
It should be noted, however, that the county Property Valuation Administrator is charged with the duty of assessing property for purposes of state taxation as well as for city and county taxation. See KRS 132.420. Therefore, notwithstanding the fact that the above-described grain is not subject to ad valorem taxation by the city or county, it must be listed with the county Property Valuation Administrator for taxation by the state.