The NSW Administrative Decisions Tribunal has denied the primary production land tax exemption claimed by husband and wife taxpayers in relation to bee breeding operations under s 10AA(3)(b) of the Land Tax Management Act 1956 (NSW) for the 2009 land tax year.
The taxpayers purchased the subject property in 2005 and had hoped to commence a subterranean water extracting business. However, when applications to obtain a licence failed, the taxpayers commenced a business of breeding fees for sale. The Tribunal heard the property supports roughly 50 hives all year around. The Commissioner assessed land tax for the 2009 land tax year. Essentially, the Commissioner argued the dominant use of the land was for residential purposes – 2 homes were located on the land.
The Tribunal held the breeding of bees for the purpose of selling them constituted “the maintenance of animals…for the purpose of selling them…” under s 10AA(3)(b). In did so, on the proviso that “the exemption would only apply to bees in a hive or where bees are in the owner’s sight, and the owner has a lawful power to pursue them.” However, when comparing all the uses of the land, the Tribunal held the “dominant use” of the land for the relevant year was for residential purposes and not for bee breeding operations. Accordingly, the Tribunal affirmed the land tax assessment.
(A & A Palk v Chief Comr of State Revenue [2012] NSWADT 94, NSW Administrative Decisions Tribunal, Verick JM, 18 May 2012.)
[LTN 96, 21/5]