New Jersey is making it harder for residents to receive farmland assessment discounts on properties that are questionably farms.

The Garden State in 1964 began letting farmers pay less in property taxes through a reduced assessment that was based on a complicated analysis of the land.

This reduces the taxable value of farmland in some areas of New Jersey by as much as 90 percent compared to other kinds of commercial or residential property; the exact discount is determined by such factors as whether the farm has crops or woodlands, and the quality of its soil.

Since this policy was enacted, tax assessors and the New Jersey Farm Bureau have been debating what constitutes a farm in a state that has a variety of livestock, greenhouses, crops, nurseries, bogs, orchards and timber. For decades, New Jersey has let landowners claim a reduced assessment if they had at least 5 acres of dedicated farmland with a harvest or yield that earns them at least $500 per year in revenue; for 2013, the revenue requirement was increased to $1,000.

New Jersey residents pay among the highest per-capita property taxes in the nation, according to the nonprofit Tax Foundation. This has prompted some property owners to seek tax breaks by pursuing a farmland assessment on surplus acreage.

Blueberry grower Anthony DiMeo III sells nursery stock at his DiMeo Fruit Farms in Hammonton. DiMeo, whose family harvests more than 1,000 acres of blueberries each year in northern Atlantic County, caters mostly to backyard gardeners who want to grow Jersey Fresh blueberries at home. But some customers have an ulterior motive.

“Every year, I have people come to my farm and tell me, ‘Look, we just want to buy enough blueberry bushes so we can make $500 off the property to get our farmland tax assessment. How many blueberry bushes do I need?’

“I think it’s deceptive.”

Why does it matter? Well, if some property owners who by mistake or ruse receive a reduced assessment, the remainder of the taxpayers in this zero-sum game pay more in taxes.

“My feeling is every dollar they save in taxes is a dollar out of the pockets of honest, hard-working taxpayers,” DiMeo said. “We all need to be honest with each other and take a common-sense approach. Are they a legitimate farmer? Is this a legitimate farm, yes or no?”

Taxpayers might balk at the idea of celebrities such as Jon Bon Jovi or former Gov. Christie Whitman’s family receiving a break on taxes they paid on pastoral land surrounding their affluent estates. U.S. Rep. Jon Runyan, R-3rd, faced criticism when he ran for office in 2010 because part of his Mount Laurel Township home is assessed as pasture for his donkeys.

Runyan’s 20-acre farm was assessed at just $2,900 on which he paid $131 in property taxes this year (2013), according to the Mount Laurel Tax Office. By comparison, his home was assessed at $1.4 million and he paid more than $65,683 in property taxes.

These are not farmers by most people’s definition. But Peter Furey, executive director of the New Jersey Farm Bureau, said the question state taxpayers should ask is not is he a farmer, but rather is it a farm?

“You don’t look at the personality of the person. Think of Bruce Springsteeen, who owns farmland and leases it to a tenant farmer who applies organic agriculture. There’s nothing wrong with that, even though ultimately he’s a celebrity,” Furey said.

Furey said there is a lingering sentiment in New Jersey that to receive a farmland assessment, the landowners must look the part.

“We’d say it’s not appropriate to test someone’s (financial) means. You should look at how the land is being used,” he said.

Lawmakers this year made it slightly harder for small farmers to win a reduced assessment by doubling the annual earnings a dedicated farmland must yield from $500 to $1,000. Furey said this higher standard won’t pose a hindrance to working farmers.

Meanwhile, assessors are looking to the state Legislature to help answer the lingering question: what is a New Jersey farm?

There is no simple answer, Cape May County Tax Administrator George Ray Brown III said.

“When it comes to cropland, it’s pretty easy to audit,” he said. “You can tell when cropland has been used. You can visit the property and see the crops are planted.”

But this is not so easy when it comes to grazing pastures for livestock, he said.

This was the question that tax assessors posed to Runyan when he had a single donkey for his 20 acres of pasture in Burlington County, according to published reports.

“Say you have 5 acres. Your argument is you only need one sheep to qualify,” Brown said.

The Legislature is expected to clarify rules over livestock this session, Brown said.

“It’s the farmers who are developing these regulations – how many acres are necessary to raise that type of animal,” he said.

Brown said his guiding principle is the phrase “active devotion” drafted in state law over assessments. Farms must be actively engaged in farming operations to qualify for a reduced assessment, he said.

Assessors inspect farms every three years to ensure they are entitled to the reduced assessment, he said. This is essential, Brown said, because farms are rarely the same from year to year, growing or shrinking, adding or knocking down barns or out-buildings that are not exempt from reduced taxation and – sometimes – growing nothing at all.

His office takes farm inspections so seriously that the county has its own undercover inspector who examines questionable assessments every three years.

“There should be efforts to police that. There has been evidence of abuse in the past. It’s not totally foreign that there are people out there taking advantage of the law,” he said.

The rules are strict.

Warren and Barbara Nuessle lost their farmland assessment on their Bay Springs Farm in Lower Township, Cape May County, when a county survey determined they fell short of the acreage requirement. The couple raise 36 alpacas for wool and sell alpaca-fleece socks, mittens and scarves year-round at a small store attached to their home.

But since their pastures account for only 4.5 acres of their 10-acre property, they were ruled ineligible for a farmland assessment, even though they sold the development rights for their farm in perpetuity to Cape May County.

Years ago, Nuessle planted trees and native bushes on 3 acres of her land as part of a federal wildlife-incentive program. Their farm is less than a mile from Higbee Beach, one of the county’s most popular birding destinations.

Every spring and fall, her trees and bushes fill with migrating warblers.

Nuessle said she could tear up the berry bushes and cut down trees to make up the half-acre of grazing land, but she is loathe to destroy the “veritable jungle” she calls her back yard. In the meantime, she and her husband are paying about $11,000 more per year in Lower Township property taxes without the farmland assessment, she said.

“We’re just backed in a corner,” she said. “The fact is New Jersey doesn’t appreciate farmers. They really would rather have everything developed to the hilt. They consider that the highest, best use of the land.”

The New Jersey Farm Bureau said the state should not single out small farms for special scrutiny. Even the smallest New Jersey grower contributes indirectly to lower taxes in their municipality by providing open space, the bureau’s Furey said.

“There should not be any discrimination toward small-scale agriculture when it comes to farmland assessment. Small farmers are welcome in New Jersey agriculture, and always have been,” he said.

“If there is a bias or perception of false entitlement associated with small agriculture, we want to make it very clear. We represent all agriculture,” he said.

Farmers such as Mark Ferguson, of Galloway Township, said the reduced assessment is an essential part of their business plan.

Ferguson has been growing a variety of vegetables on 10 acres in Cologne for the last 20 years.

He got into farming after working for years in the heating and air-conditioning business.

“I enjoy this a lot more,” he said.

“If I didn’t have a farmland assessment, I wouldn’t be able to afford the taxes. It would put me out of business,” he said.