Connecticut Farm Tax Exemptions: PA 490, Sales Tax, and Abatements

Connecticut farm tax exemptions fall into four programs that stack: PA 490 use-value land assessment, local property tax exemptions on machinery and livestock (and in some towns, buildings), a sales tax exemption on production supplies, and an optional municipal abatement of up to 50 percent of a farm’s property tax. Each has its own income threshold, form, and deadline, and missing a filing window usually costs a full assessment year.

Who Counts as a Farmer

Before any exemption applies, your operation has to fit Connecticut’s statutory definition of agriculture under General Statutes § 1-1(q). The definition is broad: cultivating soil, dairying, forestry, raising livestock (including horses, bees, poultry, and fur-bearing animals), harvesting shellfish or fish, and producing maple syrup or honey all qualify.¹ Post-harvest activities like drying, packing, freezing, and delivering crops count when they are part of normal farm operations, and greenhouses, hoophouses, nurseries, and orchards all qualify as farm structures.

One carve-out matters even though recreational use is legal: cannabis cultivation is explicitly excluded from the farming definition.¹ A cannabis grow cannot claim any of the farm benefits below.

PA 490 Use-Value Land Assessment

Public Act 490 is usually the biggest money-saver. Under General Statutes § 12-107b, land classified as farm land is assessed at agricultural use value instead of fair market value.² On land that a developer would pay heavily for, that shift can cut a property tax bill by 90 percent or more.

There is no minimum acreage. The assessor decides whether the land genuinely functions as a farm, and will typically look at your business plan, photos of farming activity, equipment on site, crop productivity, and the income and expense figures on your IRS Schedule F.³ An on-site inspection is standard. Woodland and wasteland that function as part of a working farm unit are included in the classification.²

Apply using Form M-29, filed with your town assessor between September 1 and October 31. In a revaluation year, the deadline extends to December 30. File a separate form for each parcel. Missing the window is treated as a waiver for that assessment year.

The 10-Year Conveyance Tax

PA 490 classification comes with a serious catch. Sell or transfer classified farm land within ten years of acquiring it or first classifying it (whichever came earlier), and Connecticut imposes a conveyance tax on top of the normal real estate transfer tax.⁴ The rate starts at 10 percent of the total sale price in year one and drops one point each year until it disappears after year ten. On a $500,000 sale in year three, that is $40,000.

Classification is personal to the owner and does not transfer with the land. A new owner has to file a fresh M-29 to keep the reduced assessment. Several transfers are exempt from the conveyance tax, including transfers at death, deeds between spouses or from parent to child without consideration, foreclosure deeds, eminent domain, transfers to a qualifying nonprofit, and deeds carrying a covenant to keep the land in its classified use for at least eight more years.⁵

Property Tax Exemptions on Machinery, Livestock, and Buildings

The second major program exempts farm personal property from local tax. The income floor here is higher than for the sales tax exemption: you need at least $15,000 in gross sales from farming, or $15,000 in farm-related expenses, in the tax year immediately before the assessment year.⁶

Machinery

General Statutes § 12-91 exempts all farm machinery (except registered motor vehicles) up to $100,000 in assessed value per qualifying farmer, group, partnership, or corporation.⁷ Horses or ponies used exclusively in farming are fully exempt under the same statute. This base exemption applies statewide and does not require a town vote.

Towns can add more. If the local legislative body approves it, the municipality may provide an additional machinery exemption of up to $250,000 in assessed value, raising the potential total to $350,000.⁷ Public Act 24-151 lifted the local option from $100,000 to $250,000 effective June 2024, so older guidance may be out of date.

Livestock and Produce

Under General Statutes § 12-81, sheep, goats, swine, dairy and beef cattle, oxen, mules, and poultry kept in Connecticut are fully exempt from property tax.⁸ All other livestock is also exempt, with the exception that horses and ponies not used in farming are only exempt up to $1,000 in assessed value each. Farm produce still owned by the producer is exempt as well. The $15,000 threshold does not apply to these livestock and produce exemptions.

Farm Buildings

Municipalities may also exempt farm buildings from property tax up to $500,000 in assessed value per building, if the local legislative body adopts the option.⁷ Eligible structures have to be used exclusively in farming or to house seasonal farm employees. A personal residence does not qualify. The cap was raised from $100,000 to $500,000 by the same 2024 law. Each building is evaluated individually, so multiple barns or greenhouses can each claim up to the cap.

Sales Tax Exemption on Farm Supplies

Connecticut’s 6.35 percent sales and use tax does not apply to tangible goods purchased exclusively for agricultural production, provided you hold a valid Farmer Tax Exemption Permit. The income bar is much lower than for property tax relief: at least $2,500 in gross farming income in the prior tax year, or an average of $2,500 across the two prior years.⁹ New owners who recently bought an existing agricultural business may qualify for up to two years without meeting the income floor.

Qualifying purchases include tractors, trucks used exclusively on the farm, refrigeration equipment, feed, fertilizer, seed, and any other tangible goods used solely in production.¹⁰ The operative word is “exclusively.” A pickup that doubles as your personal vehicle does not qualify, household purchases do not qualify, and misuse can trigger penalties and loss of the permit.

Local Farm Tax Abatement

Some Connecticut towns go further under General Statutes § 12-81m, which lets a municipality abate up to 50 percent of property taxes for qualifying farm businesses.¹¹ This is a separate program that requires a vote by the town’s legislative body and board of finance. Eligible operations include dairy farms, fruit orchards and vineyards, vegetable farms, nurseries, tobacco farms, commercial lobstering on maritime heritage land, and farms using methods like hydroponics. Not every town has adopted it, so check with your assessor. The same $15,000 threshold applies, and abatements are typically granted for a fixed term and may be renewable.

Forms and Deadlines

Each program files separately. The deadlines rarely move, and there is no general grace period.

PA 490 farmland classification. File Form M-29 with your town assessor between September 1 and October 31 (or by December 30 in a revaluation year). A separate M-29 is required for every parcel. Bring your business plan, photos, equipment list, and Schedule F.¹²

Property tax exemptions on machinery and buildings. File Form M-28, parts A and B, with your town assessor by November 1 each year, together with your personal property declaration.¹³ This is an annual filing. Keep your most recent Schedule F ready to prove the $15,000 threshold.

Farmer Tax Exemption Permit. Apply by filing Form REG-8 with the Department of Revenue Services.¹⁰ DRS now processes REG-8 renewals through the myconneCT portal, and new applications may be available there too.¹⁴ DRS issues the OR-248 permit on approval; present it to retailers for tax-free purchases. The permit must be renewed periodically.

One federal piece affects state eligibility. The IRS presumes an activity is for-profit if it turns a profit in at least three of the last five tax years (two of seven for horse breeding, training, showing, or racing).¹⁵ A hobby classification means no Schedule F, which cuts out your main proof of income for both the $15,000 and $2,500 thresholds. Keep detailed business records from day one.

If an Exemption Is Denied

If your assessor denies a farm exemption or you believe your property has been overvalued, the first step is a written appeal to your local Board of Assessment Appeals. The filing deadline is typically in late February; some towns extend to mid-March. For 2026, the standard deadline is February 20, or March 20 in towns that have opted for the extension.

If the local board does not resolve the issue, you can go to Connecticut Superior Court under General Statutes § 12-117a. For real property assessed at $1 million or more, you must file an appraisal with the court within 120 days of starting the case, though a judge can extend that for good cause. Given the cost of a court appeal, most farm operators exhaust the local board process first and consult a property tax attorney before going further.

1
Connecticut General Assembly. Connecticut General Statutes Chapter 1 – Construction of Statutes
2
Justia. Connecticut Code 12-107b – Definitions
3
Connecticut Department of Agriculture. Laws Pertaining to Ag Land Taxation and Preservation
4
Justia. Connecticut Code 12-504a – Conveyance Tax on Sale or Transfer of Land Classified as Farm, Forest, Open Space or Maritime Heritage Land
5
Justia. Connecticut Code 12-504c – Excepted Transfers, Change of Ownership Requirements
6
Connecticut General Assembly. Bill Analysis sHB 7175 – An Act Establishing a Farm Investment Tax Credit and Increasing the Farm Machinery Property Tax Exemption Amount
7
Justia. Connecticut Code 12-91 – Exemption for Farm Machinery, Horses or Ponies, Additional Optional Exemptions for Farm Machinery and Farm Buildings or Buildings Used for Housing for Seasonal Employees
8
Justia. Connecticut Code 12-81 – Exemptions
9
Justia. Connecticut Code 12-412 – Exemptions
10
Connecticut Department of Agriculture. Sales Tax Exemption for Farmers
11
Justia. Connecticut Code 12-81m – Municipal Option to Abate Property Tax for Certain Farm Businesses
12
Internal Revenue Service. Schedule F (Form 1040) – Profit or Loss From Farming
13
Connecticut Department of Agriculture. Agricultural Property Tax Exemptions and Abatements
14
Connecticut Department of Revenue Services. REG-8 Farmers Tax Exemption Permit – myconneCT Tutorial
15
Internal Revenue Service. Is Your Hobby a For-Profit Endeavor?