Agricultural Land


We classify agricultural land based on ownership, size, and use (15-7-202, MCA).

A parcel of land is classified as agricultural land if it is 160 acres or greater.

To be classified as agricultural land, parcels under 160 acres must meet the following basic criteria:

Summary of Agricultural Land Classification Eligibility Requirements (PDF, 114 KB)

Agricultural Land Classification

To qualify as agricultural land for the current tax year, submit an Agricultural Land Classification Application (Form AB-3) to your local field office by March 1.

Provisional Agricultural Land Classification

Property owners of a fruit orchard, vineyard, or Christmas tree farm, may apply for provisional agricultural land classification for five years to allow their agricultural product to reach salable maturity. (15-7-202, MCA)

To qualify for provisional agricultural land classification for the current tax year, fill out the provisional agricultural land classification section within the Agricultural Land Classification Application (Form AB-3) and submit the completed form to your local field office by March 1.

Types of Agricultural Land

Agricultural land has five subclasses to determine the productive value for property tax purposes.

Land TypeUseProductivityCommodity
Grazing LandLand used for grazing livestock and includes irrigated grazing landAnimal unit months per acre (aum/ac)Private Grazing Fee
Tillable Irrigated LandLand that is irrigated the majority of the timeTons of alfalfa hay per acreAlfalfa Hay
Non-Irrigated Continuously Cropped Hay LandLand used to produce hay the majority of yearsTons of hay per acreAlfalfa Hay
Non-Irrigated Summer Fallow Farm LandLand used for dry land farmingBushels of spring wheat per acreSpring Wheat
Non-Irrigated Continuously Cropped Farm LandLand used to grow crops three out of four years. This must be an accepted practice for the area. It's mostly found in northwestern MontanaBushels of spring wheat per acreSpring Wheat

Agricultural Land Value

We value agricultural land by dividing the net income per acre by the capitalization rate. (15-7-201, MCA)

Net Income Per Acre/Capitalization Rate = Value Per Acre

Net Income Per Acre
We determine net income using:
  • productivity,
  • the 10-year Olympic average of the appropriate commodity price,
  • a crop share or livestock expense factor, and
  • for irrigated land, the cost of delivering water from its source to the crop.
We gather production data from the Natural Resources Conservation Services (NRCS) and commodity price data from Montana Agricultural Statistics. (ARM 42.20.681)
Other sources of publicly available information may be used if suggested by the Agricultural Land Advisory Committee and the department adopts it by rule. (15-7-201, MCA)
Capitalization Rate
The capitalization rate is set by statute. (15-7-201, MCA)
The current rate is 6.4%

For more information on agricultural land valuation, refer to the 2023-2024 Agricultural Land Manual (PDF, 651 KB).

Non-qualified Agricultural Land

Non-qualified agricultural land is:

For more information, please see 15-6-133, MCA and ARM 42.20.681.

Nonproductive Patented Mining Claims

Nonproductive patented mining claims are land purchased from the federal government for the sole purpose of a mining operation and are:

Nonproductive patented mining claim land is valued as agricultural grazing land. (ARM 42.20.681)

Applying for a Mining Claim Classification

To apply, submit a Patented Mining Claim Application (Form AB-13) and return it to your local field office within 30 days from the date on your classification notice to be considered for the current tax year.

(15-6-133, MCA and ARM 42.20.301-307)

Paying Agricultural Land Property Tax

The elected county treasurer in each county bills and collects agricultural land property tax.