Clean and Green Update: Court Rules Tax Sale is not a Split-off

Written by M. Sean High—Staff Attorney

On November 7, 2016, the Commonwealth Court of Pennsylvania determined that a landowner’s failure to pay property taxes, which resulted in a tax-upset sale, was not a “split-off” under the Pennsylvania Clean and Green program and did not trigger the roll-back tax penalty (A. Maula v. Northampton County of Assessment and County of Northampton - 1341 C.D. 2015).

Under the Pennsylvania Farmland and Forest Land Assessment Act of 1974 (commonly known as Clean and Green) qualifying Pennsylvania farmers and woodland owners have the opportunity to receive preferential tax assessments based on land use (72 P.S. §§ 5409.1 – 5409.13).  Participants, however, may be subject roll-back taxes if the landowner conducts a “split-off” which is a division of land enrolled in Clean and Green where one or more of the tracts no longer meet program requirements.  

According to the court, on April 22, 2009, Anthony Maula (Maula) owned one contiguous tract of land which consisted of three separate parcels: Parcel A (26.7 acres); Parcel B (55.2 acres); and Parcel C (2.88 acres).  On April 22, 2009, Maula enrolled the entire tract (Parcels A, B, and C) for preferential tax assessment under the Clean and Green program.

The court stated that for the years 2011, 2012, and 2013, Maula did not pay property taxes on Parcel C for an amount totaling $266.12.  Subsequently, on September 24, 2013, Northampton County (County) sold Parcel C at a tax sale to pay the back taxes. 

On March 21, 2014, pursuant to the tax sale, the County conveyed title to Parcel C to a third party.  On July 11, 2014, the County Tax Assessment Office learned that Parcel C had been conveyed to a third party and determined that it was an impermissible split-off because Parcel C no longer met Clean and Green requirements of being either ten acres or generating a yearly gross agricultural income of $2,000.  As a result, the County notified Maula that roll-back taxes were due and owing on Parcels A, B, and C in the amount of $55,757.61.

The court disagreed with the County and held that “the sale of Parcel C at an upset sale did not constitute an impermissible split-off because it was not a division of a larger tract ‘by conveyance or other action of the owner’” as required by Clean and Green 72 P.S. § 5490.2.  According the court, the conveyance of Parcel C “was actually performed by the County via the tax sale…[and that] [i]t would be a strained statutory construction to impose liability on a landowner for purportedly allowing a conveyance to occur when a third party performs the conveyance, not the landowner.”