ALBUQUERQUE, N.M. — Wild, natural land adjacent to the Pecos River in San Miguel County is exempt from property tax because conservation is a “charitable purpose” under state law, the New Mexico Court of Appeals has ruled in a precedent-setting case.
The New Mexico Constitution doesn’t explicitly exempt land held for conservation from property tax, so the appeals court’s examination of the issue was a first-time analysis.
The appeals court’s unanimous ruling in January said conservation of the 60-acre parcel by the nonprofit Pecos River Open Spaces Inc. “provides a benefit of real worth and importance to the public,” justifying the exemption as one that provides a public good by a private actor.
The county did not seek review by the state Supreme Court.
Santa Fe attorney Richard Hughes, who represented the nonprofit, said the organization had a good argument that it met relevant criteria for tax-exempt status.
“The Legislature has made conservation of land in its natural state a significant goal and has enlisted charitable organizations to achieve that goal,” he said.
“Importantly,” Hughes said, “this would not apply to a private person. You have to have a conservation organization that’s committed” to maintaining the land. The conservation easement on the land prevents any development or construction of any kind and the nonprofit’s intent is to preserve the property in its natural state.
He said federal tax laws
clearly define organizations qualified to have conservation easements – basically, groups set up for the express purpose of maintaining land in a natural state. So the appeals court ruling will be especially meaningful for groups like the Santa Fe Conservation Trust, the New Mexico Land Conservancy and the Taos Land Trust, he said.
The San Miguel County assessor argued that conservation, while a laudable goal, didn’t make the land nontaxable.
The charitable exemption, in the position advanced by County Attorney Jesus Lopez, should not be allowed for land that is “idle, unimproved and not in actual use,” a phrase from a 1978 land tax ruling in a case brought by the National Rifle Association over its property in New Mexico.
Pecos River Open Spaces acquired the 60-acre property, which Hughes called “stunning,” in 2008 as a gift from Genevieve Coonly. It is located a quarter-mile from the Pecos River Canyon near Ilfeld. The nonprofit, headed by Christopher Thomson, later added another 16-acre parcel bordering Coonley to other tracts under conservation easements, including one 40-acre parcel and 17 acres with a swimming hole.
Litigation began when the county assessor sent a tax bill for about $600 and the nonprofit appealed unsuccessfully to the county’s Valuation Protests Board, which said conservation was not a charitable purpose. The nonprofit took the issue to district court, where Judge Eugenio Mathis reversed the tax board. Then the Assessor’s Office appealed.
The appeals court noted that San Miguel County has a conservation goal stated in its 2004 comprehensive plan, and that county residents want to incentivize preservation through conservation easements and purchase of development rights.
Appeals Court Judge Miles Hanisee, who authored the opinion, noted because of a public policy encouraging open space and the land’s significance as wildlife habitat, “we conclude conservation of this parcel contributes to environmental preservation and beautification of San Miguel County and the State of New Mexico.”
The opinion warns that not every act of conservation will classify land as beneficial to the public, and thus charitable.
“Such determinations entail inquiries and determinations of fact by the county boards that consider valuation protests in New Mexico,” it says.