Property Taxes on the Farm

New Ag Census Shows Disparities in Property Taxes by State

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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2017 Ag Census data shows California and Nebraska farmers and ranchers pay more in property taxes than other state. The chart shows states with property taxes higher than the national average in the Ag Census. (DTN chart by Nick Scalise)

OMAHA (DTN) -- The big fight in the Nebraska Legislature this year is over plans to reduce property taxes, which has the state's farm lobbies pushing lawmakers hard for some relief.

Numbers taken from the 2017 Ag Census show Nebraska farmers have more reason to complain about property taxes than farmers in nearby states.

Farm income nationally fell between 2012 and 2017, and land values fell in some states during that time. Property taxes nationally for farmers went up $2 billion over that five-year stretch, jumping from $7.4 billion to $9.4 billion. The average property-tax increase nationally was $21.3%. Just one state, Rhode Island, collected less in property tax from farmers and ranchers over that five-year stretch, according to the Census figures.

Property taxes paid by farmers are listed among farm production expenses on a major initial data set for the 2017 Ag Census, which USDA released last week.

California remains the highest state for taxing farmers' property. In 2017, the 65,129 ranch and farm operations in California paid $1.126 billion, an average of $17,299 per farm. And California farm property taxes rose $300 million over that five-year span despite losing 6,297 farms. California property taxes paid rose 26.5% from 2012-2017.

Nationally, 1.92 million farmers paid $9.4 billion worth of property taxes in 2017, up $2 billion from five years earlier, a 21.3% increase. The average property tax paid by farmers nationally was $4,902 in 2017, compared to $3,752 per farm in 2012.

Texas was the second-highest state for property taxes at $698.2 million, a 20.6% hike from 2012. But those property taxes were split among 236,030 total farmers, so the average property tax paid was $2,958 per farm.

Nebraska fell in as the third-highest state for property taxes in 2017 with 42,502 farmers paying $686.5 million, a 30.2% hike from 2012. On a per-farm basis, that breaks down to $16,151, second only to California.

Nebraska policymakers want to reduce property taxes, but Gov. Pete Ricketts has pushed back against efforts by the nonpartisan unicameral Legislature to offset property-tax cuts with higher sales taxes or other tax hikes. Ricketts has aggressively held public events with various businesses that could be forced to tax their products or services. Farm groups, though, are part of a coalition seeking property-tax relief.

"It's the No. 1 issue in the legislative session," said John Hansen, president of the Nebraska Farmers Union. "It's our organization's No. 1 issue, and I would say it is the No. 1 issue for most every ag organization I know."

More than 91% of Nebraska's agricultural property taxes, about $625.7 million, were paid by just under 40% of the state's larger farm and ranch operations. Those farms each reported paying more than $10,000 in property-tax expenses. The state-level data for each state breaks down farm expenses, including property taxes, into a range of reported levels.

South Dakota farmers paid an average of $9,568 per farm in 2017, the third-highest rate in the nation. The 27,308 farmers in 2017 in South Dakota also saw their property taxes increase 24.6% in the five years since the 2012 Ag Census.

Kansas farmers saw their property taxes increase 29.7% during that time -- the third-highest jump in percentage -- as they paid an average of $5,831 in property taxes.

Illinois farmers also saw a 25.5% hike in their property taxes from 2012-2017 to an average of $6,379 per farm.

Iowa farmers collectively pay the fourth-most property taxes by state at $538.3 million, or an average of $8,589 for the 79,926 farmers on the 2017 Ag Census. Iowa property taxes rose 18.7% over that time.

Ohio farmers paid $411.7 million, which comes out to an average of $5,518 per farm. But Ohio farmers saw the largest increase in property taxes by percentage over the five years of the Ag Census. Property taxes for the 74,609 Buckeye farmers rose nearly 43% from 2012.

Alaska, Rhode Island, Delaware, Hawaii and Nevada collected the smallest amount of overall property taxes in the country. According to the Ag Census, Rhode Island was the only state to see a decline in property taxes, collecting 6.7% less from farm operations than 2012. Of the smallest states with farm property taxes, though, Rhode Island government entities collected an average of $7,419 per farm.

The 2017 Census of Agriculture: https://www.nass.usda.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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Chris Clayton