Agriculture exempt???

Discussion in 'Homesteading Questions' started by ShyAnne, Jul 19, 2008.

  1. ShyAnne

    ShyAnne Well-Known Member

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    I am in Montgomery county Texas. I was told if I have livestock I can become agriculture exempt. I have searched on line but I am not sure what this is and what the requirements are.
    Does anyone have any information about this???
     
  2. highlands

    highlands Walter Jeffries Staff Member Supporter

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    It often refers to taxation on the real estate (land, buildings) or sales tax you would pay on purchases. Note that you may have to earn 51% of your income for the ag excemption to kick in. It varies with state / local law.

    Cheers

    -Walter
    Sugar Mountain Farm
    in the mountains of Vermont
    http://SugarMtnFarm.com/blog/
    http://HollyGraphicArt.com/
    http://NoNAIS.org
     

  3. dlwelch

    dlwelch Well-Known Member

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    Contact your county appraisal office for assistance regarding
    your land used for farming/agriculture. We have cattle on our
    small acreage which allows for the exemption.

    Also a sales tax exemption can be signed and given to the business
    if purchasing something for "farm or Ag use". Google for
    "Texas agriculture sales tax exemption" and you should find more
    information.


     
  4. ShyAnne

    ShyAnne Well-Known Member

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    Thanks Yall I knew I would get help here!
     
  5. Darren

    Darren Still an :censored:

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    WV follows the USDA definition of a farm. As long as you produce $1,000 worth of ag products, you have a farm if you're in a rural area. Note that $1,000 worth can be entirely consumed by your family. In other words, you don't have to show receipts.

    Your county assessor's office will decide whether your property will be classified as a farm. Here they list all of your livestock, hay production, etc. to make the determination.
     
  6. BlueHeronFarm

    BlueHeronFarm Well-Known Member

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    I'm in the next county over - Waller.

    It does depend slightly on county rules, but in general around here, you must meet at least one of the exemption categories for 5 out of 7 consecutive years before you are eligible to get the exemption. (This makes it worthwhile to buy a place that is already ag exempt.)

    Our exemption is currently for hay. This is absolutely insane to us, but we do not seem to qualify for the exemption based on our animals, even though we are a functioning dairy farm and 100% of our income is from the farm. ...we've put that on our list of things to try to get changed. ;)

    You can call your tax office directly, but another good place to go is your extension agent. They can help you assess the best plan for your land. Be aware that in some counties there is a minimum acreage for eligibility - in our county that magic number is 10. Again - totally ridiculous if you ask me, you can run a functional farm on less. But I don't get to make the rules. ;)
     
  7. sarhound

    sarhound Well-Known Member

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    I'm moving to Franklin County--the farm is 24 acres, used to be an old dairy farm. It's been ag-exempt for almost 30 years with the prior owner. Our exemption is in hay right now, but we'll probably run some cattle, too.

    Out my way, you can also get an exemption for timber--I don't think we have enough to qualify out on that place, though. Most places in Marion County, where I live now, are timber exempt.
     
  8. dlwelch

    dlwelch Well-Known Member

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    Montgomery County Appraisal District has excellent on-line info!
    Note: This is handled by the Appraisal District and not the
    Tax Assessor/Collector. In some counties, they *could* be in
    the same office but they are separate entities.

    http://www.mcad-tx.org/html/special.html

    The forms are provided for the exemption you are seeking.

    You will not want to apply for a 1-d appraisal unless all your
    income is derived from farming/ranching. Apply for 1-d-1
    for your property tax savings. Either way, the savings are the
    same.

    Hope this helps to clarify. Sorry I didn't search for you when I
    responded earlier.

    Linda Welch
     
  9. milkinpigs

    milkinpigs Dairy/Hog Farmer

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    I agree that it should be based on the percentage of income.
    I wish Texas would get much tighter on ag-exempt requirements...when you farm for a living it gets old seeing doctors,lawyers,white collar types, pilgrims and play farmer wannabes using it as a tax dodge.


    Maybe anyone seeking ag exemption should have to make their sole living from farming for a year....lot of the folks moving here from the metromess would stay down there.
     
  10. BlueHeronFarm

    BlueHeronFarm Well-Known Member

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    Well, my complaint is that it has nothing to do with Ag, really. My county sets unreasonable stocking rates that would turn our farm into a dirt lot in a year or less. Not a very ag-friendly way to get our exemption. I don't really mind if people want the ag exemption and don't farm - so long as they are not building McMansions or selling out to developers.
     
  11. milkinpigs

    milkinpigs Dairy/Hog Farmer

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    If you don't farm for the majority of your income you shouldn't be allowed ag exemption, period.

    Texas should get much stricter with the farm use tax exemption and farm tags as well.

    If people want to take advantage of these things;instead of playing at it, get out and fight it in the heat and cold, wet or dry seven days a week.

    If I buy a white coat and stethascope,I can't get a medical license; Buying a briefcase and a nice suit doesn't allow me to practice law.
     
  12. highlands

    highlands Walter Jeffries Staff Member Supporter

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    The unfortunately the percentage of income ruler can bite a real farmer in the butt.

    1) Many (most?) farmers also have an off farm job of some sort in the family and all family income gets included in the calculation around here (Vermont).

    2) Some years are better than others so some years you qualify and some years you don't by the percentage of income. That's dumb - we're doing the same thing each year.

    3) If you sell a piece of land, a farm asset, it throws your percent of income ratio out of balance. If you sell development rights it throws you out of balance. etc

    4) If you have income from wind power, cellphone tower rental, etc it doesn't count as farm income.

    5) If you have logging income (most farmers around here log in the winter) then that throws you out.

    6) If you have carpentry income (many farmers do) then that throws you out.

    The system should protect against abuse but the way it is currently setup is bad.

    We do really farm and that is virtually all of our income most years but if our logging, firewood, etc get too big one year it jeopardizes our standing as a 'farm'.

    Cheers

    -Walter
    Sugar Mountain Farm
    in the mountains of Vermont
    http://SugarMtnFarm.com/blog/
    http://HollyGraphicArt.com/
    http://NoNAIS.org
     
  13. mary,tx

    mary,tx Well-Known Member Supporter

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    Well, I do not farm for a living, and I do NOT think I need taxed more!!
    My Ag exemption does not effect anyone else's, and we do have to maintain it. We maintain ours by leasing out the fields to cattle. Someday we'd like to have our own, but we can't afford enough to do that now.

    If we lost the exemption, which was on the property when we bought it, we'd be subject to five years of roll-back taxes.

    Why should I have to pay higher rates on an old farm which has never been developed or used for anything else but agriculture?

    mary
     
  14. whinnyninny

    whinnyninny Crazy about horses

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    We get our tax statement every year and it automatically counts our acreage as ag exempt (not our house or shed or the front 1.5 acres or so of our property... just the remaining 12.5 acres which often has nothing growing on it at all, and which will soon be pasture). We didn't have to fill out anything.
     
  15. BlueHeronFarm

    BlueHeronFarm Well-Known Member

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    Well, be careful. I would look into what that exemption is for and make an effort to maintain it in some way. If they come to appraise and you are not fulfilling whatever your exemption is for, you can be rolled back. Not saying they will - just that they can. We take photos of the hay being cut and the bales in the field to prove ours.

    milkinpigs, I respectfully disagree with the premise that your income needs to come from farming for you to deserve the exemption. I think anyone who is putting the land to good use and working towards the sustainability of open spaces and maintenance of arable land should get the tax break.

    Mary is letting cows graze and then poo on her place. Good old-fashioned nutrient cycling. That's a good thing. Much better than digging it up to put in a swimming pool. I think she deserves the break as much as I do for producing food. Not to mention those cows will be food, eventually.

    I don't think you need to be a full time farmer to practice good land management. And I think that THAT is what the credit is for. It is not an income tax credit, so it ought not to be related to your income.

    My .02
     
  16. michiganfarmer

    michiganfarmer Max Supporter

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    you arent getting taxed more. You are getting taxed the regular amount.

    Farmers are getting tax breaks so they can afford to put food on your table.
     
  17. nathan104

    nathan104 Well-Known Member Supporter

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    Im in Rains county. Im not a full time farmer. We have 5.5 acres and so far have two cows and two pigs but will be getting more animals. Weve been here right at a year and I never looked into the ag expemption which this place did not have when we bought it. Im assuming I wouldnt be able to get one with only 5.5 acres. It would definitly be nice seeing as our taxes are over $3K a year. Thats just crazy for a 30 year old house and 5.5 acres.
     
  18. jode

    jode Well-Known Member

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    Just a thought, you might want to gather the facts to temper your comments. Things are already just as you suggest they should be. Read up on it here:
    http://recenter.tamu.edu/pdf/1361.pdf
    :goodjob:
     
  19. NostalgicGranny

    NostalgicGranny Well-Known Member Supporter

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    Nathan we are in Hunt County and only have 6.8 acres we get ag, even with the front acre where our home is not counted as ag.

    Dispute finding an old horse corral out back our land wasn't ag until recently. The lady at the tax office said if we could get 2 of our neighbors to write letters saying it has been used as ag previously that they would back rate it for previous years.
    granny
     
  20. agmantoo

    agmantoo agmantoo Supporter

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    Aren't we running two different topics together here with no separation?

    We have Ag exemption which is a reduction or elimination of tax on purchases of certain items used in production of farm products.

    We have property tax deferral. This is a reduction in property tax used for agriculture production based on the ability of the land to produce. The deferral is what is based on the minimums set for the gross income and in many states the amount of property in use. With the deferral should you sell the property usually there is a rollback and you have a tax consequence.