Corporations Abuse Agricultural Tax Policies

In several states across the country, farmers and ranchers are given preferential property tax rates. Rather than having their farmland taxed at market value (which, given the increasing value of farmland, would be significantly high), farmers are often taxed a much lower agricultural rate, which taxes what farmers produce, rather than the worth of their land.

These tax breaks were written with the volatility of the farm sector in mind and are designed to protect farmers in times of bad harvest.

Corporations across the country, however, are taking advantage of these tax breaks to save anywhere from hundreds of thousands to millions of dollars. Land speculators, currently holding significant acreage of undeveloped land while waiting for real estate markets to improve, are claiming their land as agricultural property in order to pay only a fraction of its taxable value.

In Austin, Texas, for example, computer giant Dell owns about 264 acres of land. According to the market value of that land, property taxes would amount to about $382,301. However, since Dell has a handful of cows on its land, it can claim agricultural tax valuation, meaning that they only pay about $1,000 in property taxes on their land.

Communities across the country are becoming increasingly frustrated with these sorts of corporate tax dodges. In several states, there have been calls to reform agricultural property tax valuation and increase the required level of agricultural production in order to guarantee that land taxed as farmland is actually being used as farmland.

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Written by: Justin Ellison / Farm Plus Staff Writer