Does It Come Furnished: Are Center Pivots Fixtures or Real Property?

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Phil Puccio

Central pivot irrigation systems are vital in Nebraska. Not only is Nebraska the most heavily irrigated state in the United States, it’s also the world’s largest manufacturer / user of center pivot systems.[1] Understanding how center pivot systems are classified may be important for Nebraska farmers and lawyers when buying, selling, or evaluating farmland for tax purposes that uses a center pivot irrigation system. Depending on the purposes of the classification, a center pivot system can be classified as either a “commercial object,” which is legally defined as personal property in Nebraska, or a “fixture,” an inheritance of real estate.

Neb. Rev. Stat. Section 77-103 defines real estate and includes “(1) all land; [and] (2) all buildings, improvements, and furnishings, except commercial facilities; . . . . “[2] Section 77-105 defines personal property that includes commercial facilities, “that is, machinery and equipment, regardless of the degree of connection with real estate, that is used directly in real estate trading, manufacturing or processing activities, whether or not the real estate” is owned or is leased. . . . “[3]

The terms are similarly defined in the Nebraska Admin’s Real Property Regulations. Code title 350, chap. However, 10 provides factors to determine whether an item is a “facility”. These factors include whether the property is; (1) attached or physically attached / built into the property, (2) adapted to the use of the property, i.e. the property is necessary or useful for the property to which it is connected, and (3) intends to be attached to it estate.[4] The intention arises from the type and scope of the appropriation and appropriation, unless there are documents from the owner that otherwise contradict this intention.

These factors are a replication of the test conducted by the Nebraska Supreme Court in Koch v. Beermann.[5] In Cook, a dispute broke out over a land purchase agreement for 62 hectares of arable land that included all land, including internals, but excluding irrigation equipment. In applying the factors, the court has in Cook found that the pump and motor were built-in components and were therefore included in the property purchase agreement.[6] In addition, the court found that intent “appears as the dominant consideration by the clear weight of modern authority”.[7]

In contrast, the Nebraska Supreme Court in Vandenberg v. Butler County Vol. Of Compensation[8] determined that Pivot Systems are “commercial establishments” based on legal and administrative definitions and are therefore treated as personal property and not real estate. Vandenberg The focus was on a dispute over the classification of a pivot system and a tax assessment of leased farmland by the district assessor. With the argument of the applicability of the court’s decision in Cook, the dish in Vandenberg the factor test for determining whether real estate is an integral part of land purchase agreements is confirmed, but is no longer used for tax purposes.[9]

As a result of the decision in Vandenberg, Center Pivot Systems are classified as “facilities” and real estate when executing land purchase agreements. However, when the time comes for the county to assess farmland, these central pivot systems will be classified as “commercial establishments” and taxed as personal property.

[1] The Groundwater Foundation, Central pivot points, The basics, (last visited on 09/10/2021).

[2] Neb. Rev. Stat. § 77-103.

[3] Neb. Rev. Stat. § 77-105.

[4] Nebraska Administrator. Code title 350, chap. 10, Reg-10-002.18B (2021). For the definition of “trading device” see Nebraska Admin. Code title 350, chap. 10, Reg-10-002.24 (2021).

[5] Cook v. Beermann, 201 Neb. 675, 271 NW2d 459 (1978).

[6] Cook, 201 Neb. At 679, 271 NW2d at 462.

[7] ID card.

[8] Vandenberg v. Butler County Vol. Von Compensation, 281 Neb. 437, 796 NW2d 580 (2011).

[9] Vandenberg, 281 Neb. At 442, 796 NW2d at 583.

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