Central pivot irrigation systems are vitally important in Nebraska. Not only is Nebraska the most irrigated state in the U.S., it is also the largest producer/user of center pivot systems in the world. For Nebraska farmers and legal practitioners alike, it may be important to understand how center pivot systems are classified when either buying, selling, or assessing, for taxation purposes, farmland that utilizes a center pivot irrigation system. Depending on the purposes of the classification, a center pivot system may be classified as either a “trade fixture,” which is statutorily defined in Nebraska as personal property, or classified as a “fixture,” a concomitant of real property.
Neb. Rev. Stat. § 77-103 defines real property and includes “(1) all land; [and] (2) all buildings, improvements, and fixtures, except trade fixtures; . . . .” Section 77-105 defines personal property which includes trade fixtures, “which means machinery and equipment, regardless of the degree of attachment to real property, used directly in commercial, manufacturing, or processing activities conducted on real property, regardless of whether the real property is owned or leased . . . .”
The terms are similarly defined in the “Real Property Regulations” of the Nebraska Admin. Code Title 350, Ch. 10, however, it provides factors for determining if an item is a “fixture.” These factors include whether the property is; (1) annexed or physically attached/incorporated into the property, (2) appropriated to the use of the property, which means the property is necessary or useful to the real property it is annexed too, and (3) intended to be annexed to the real property. The intention is inferred from the nature and extent of the annexation and appropriation, unless documentation is provided by the owner that otherwise contradicts that intention.
These factors are a reiteration of the test utilized by the Nebraska Supreme Court in Cook v. Beermann. In Cook, a dispute arose over a land sale contract for 62 acres of farmland that included all real property, which included fixtures, but excluded irrigation equipment. In applying the factors, the court in Cook determined the pump and motor were fixtures and thus included in the land sale contract. Further, the court noted that intention “appears by the clear weight of modern authority to be the controlling consideration.”
In contrast, the Nebraska Supreme Court in Vandenberg v. Butler County Bd. Of Equalization determined that pivot systems are “trade fixtures” because of the statutory and administrative code definitions and are therefore treated as personal property, not real property. Vandenberg centered on a dispute regarding the classification of a pivot system and a tax assessment of leased farmland completed by the county assessor. When presented with the argument of the applicability of the determination by the court in Cook, the court in Vandenberg upheld the factor test when determining if property is a fixture in land sale contracts but that it no longer applied when used for taxation purposes.
As a result of the decision in Vandenberg, center pivot systems are classified as “fixtures” and real property when conducting land sale contracts. However, when it comes time for the county to assess farmland, these center pivot systems will be classified as “trade fixtures” and taxed as personal property.
 The Groundwater Foundation, Center Pivots, The Basics, https://www.groundwater.org/get-informed/basics/pivots.html (last visited Sep. 10, 2021).
 Neb. Rev. Stat. § 77-103.
 Neb. Rev. Stat. § 77-105.
 Nebraska Admin. Code Title 350, Ch. 10, Reg-10-002.18B (2021). For the definition of “trade fixture,” see Nebraska Admin. Code Title 350, Ch. 10, Reg-10-002.24 (2021).
 Cook v. Beermann, 201 Neb. 675, 271 N.W.2d 459 (1978).
 Cook, 201 Neb. at 679, 271 N.W.2d at 462.
 Vandenberg v. Butler County Bd. Of Equalization, 281 Neb. 437, 796 N.W.2d 580 (2011).
 Vandenberg, 281 Neb. at 442, 796 N.W.2d at 583.
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