Nev. Admin. Code § 361A.160 — 361A.160

NAC 361A.160    Determination of whether operator is engaged in business venture
for profit. ( NRS
360.090 , 360.250 , 361A.120 )
1.  Upon a determination that an activity on
the land qualifies as an agricultural pursuit, the assessing authority must
then determine whether the operator is engaged in the agricultural pursuit as a
business venture for profit. When determining whether an operator is engaged in
a business venture for profit, reasonable profit and the expectation of a
reasonable profit are not affected by any independent intervening causes of
production failure or nonproductive use that are beyond the control of the
operator, including, without limitation, land idle under government programs.
Property not otherwise fulfilling the requirements to be considered as land on
which an agricultural pursuit is conducted may still qualify as such if there
are extenuating circumstances, including, without limitation, use of the land
for an orchard or other perennial crops with a long maturation period that have
not yet matured.
2.  To qualify as a business venture for
profit, an agricultural pursuit must raise the expectation of profit consistent
with:
(a) The size of the property used in the operation;
(b) The capacity of the property, including,
without limitation, suitability, terrain, availability of water, soil
capabilities, type of vegetation grown, growing season, animal unit months,
animal units and animal unit equivalents;
(c) The viability of the property, including,
without limitation, the cost and availability of water, soil capacities, market
proximity, fencing and suitability of the property for other uses; and
(d) Any other factors or criteria that the
assessing authority deems appropriate under the circumstances.
3.  In making a determination about whether
the operator is engaged in a business venture for profit, especially in cases
where the size of the land appears to be too small to sustain a monetary profit
from agricultural pursuits, the assessing authority may consider whether a
reasonable effort has been made to care for the land sufficiently and
adequately, as evaluated in time, labor, equipment, management and capital
consistent with accepted agricultural practices for the type of agricultural
operation involved.
4.  Gross income derived from nonagricultural
uses of the land must not be included in the requirements for the total minimum
gross income, including, without limitation:
(a) Leasing of the land for billboards;
(b) Leasing of the land for roadside produce stands;
(c) Leasing of the land for hunting;
(d) Income derived from the mineral estate, whether
severed or not;
(e) Income from the extraction of sand and gravel
or other operations relating to products from the earth;
(f) Interest income from a loan or investment,
royalties or dividends; and
(g) Transfer or sale of property rights such as
conservation easements or severed mineral rights.
5.  As used in this section, “animal unit
equivalent” means the equivalent to the animal unit for various kinds and sizes
of animals.
(Added to NAC by Tax Comm’n by R030-03, eff. 12-4-2003)