County tax assessor in Arizona gets tough on agricultural exemptions; how about yours?

Most states give tax breaks to agricultural property, but the privilege can be abused, especially if local or state tax officials are lax about enforcement. In Yavapai County, Ariz., a new tax assessor has revoked about 1,000 examptions and "is reviewing the 2,963 properties listed on the county's agriculture property list to find out who is legitimate and who is not," Bruce Colbert reports for The Daily Courier in Prescott. Maybe it's time to check on the ag exemptions and enforcement in your locality.

Assessor Pamela Pearsall "said that she knows some residents are reaping tax benefits from illegal agriculture classifications, and she intends to find them and get them off the county's ag list," Colbert writes. "The monetary stakes are high. For example, a person owns a 40-acre parcel and the assessor's office values it at $200,000. That equals $5,000 per acre, which is the value on which that the owner would pay taxes. However, with a grazing exemption, the assessor values the 40 acres at $7.50 per acre, which puts that 40-acre parcel at a value of $300."

Rules and rates vary by state and often by locality. In Yavapai County, an exemption requires "the expectation of making a profit" from the land, Pearsall said. "Is it a legitimate business or is it just a hobby?" For example, Colbert explains, "Grazing land must provide enough natural forage to support 40 animal units. ... Working ranch horses count as an animal unit, but pleasure, racing and breeding horses do not." (Read more)