Property taxes on farmland set to rise next year

Missouri farmers will get a larger property tax bill next year under a plan state lawmakers are allowing to take effect.

Property taxes paid for Missouri farms are based on the land’s productive value rather than its market value. The Missouri State Tax Commission recommended increasing productive values by 5 percent, and state lawmakers’ deadline for rejecting the proposal was this past weekend. That means the new productive values will take effect for the 2015 and 2016 tax years.

The commission estimates the change could mean about 10 cents more tax per acre. Property taxes are calculated by taking the productive value, multiplying it by 12 percent and then multiplying that figure by the local tax rate.

Commission Chairman Bruce Davis said

Monday income from each acre has increased in recent years. The last change in productive value for Missouri agriculture land took effect in 1995.

The proposal “represents what’s happening in the farm economy,” Davis said. “So I think it’s an accurate depiction of that, and it’s just like somebody’s house or commercial property that rises in value.”

More than 37 million acres of agricultural land in the state is categorized into eight categories based on land quality, with the best farms in Grade 1 and the worst in Grade 8.

Better grades have higher productive values.

Land in the best category is nearly level, with deep soils that are easily worked and produce dependable crop yields. On the other end of the scale, land in the worst category is capable of limited plant growth and can be extremely dry, rough, steep, stony, sandy, wet or severely eroded. It includes rivers and swamp areas.

Nearly 24 percent of agricultural land falls in Grade 6, which will increase from $150 per acre to $158 per acre. About 23 percent of land falls in Grade 7 and will go from $75 to $79. The largest dollar increase will be for the roughly 0.6 percent of agricultural land in Grade 1, which is going from $985 per acre to $1,035. Agricultural land in Grade 8 will increase from $30 to $31.

Missouri lawmakers in 2010 and 2012 blocked tax commission proposals. The plan rejected in 2012 would have increased productive values for the top four grades while the proposal turned back in 2010 would have increased the productive value for the top four grades, lowered it for the next three categories and kept it unchanged for the lowest category.

The Missouri Farm Bureau this past December urged the tax commission to consider the effects of the weather and the markets upon productivity. It took no position about whether the commission’s proposal should be enacted.

“Productivity can vary greatly from year to year,” said the Farm Bureau’s state and local governmental affairs director Leslie Holloway on Monday. “The recommendations in the past we felt were out-of-line with the conditions. And this year that was not the case.”

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