Farmers enrolled in a state tax savings program will see an unprecedented increase in farmland values across much of Ohio next year. Average values have increased between 78% to 100%. Some farmers say the rise could affect their already thin bottom line.
Ohio’s Current Agricultural Use Valuation, or CAUV, program is a complex tax formula. It taxes farmland for its agricultural use value rather than as a development property. The formula takes into account the soil type and the yield output of corn or soybean and the land is then given a value.
Though the CAUV value of the farmland is not the same as the open market value, Whittney Bowers, director of state policy and grassroots engagement at the Ohio Farm Bureau, said.
“What I could sell my land for, that's an exchange between a willing buyer and a willing seller. And that could be any value determined,” Bowers said. “But, that doesn't mean that that is what that land is [worth] in terms of production quality, value.”
County auditors are required by state law to update property values every three years and conduct a full property reappraisal every six years, that includes CAUV values — county auditors just send out the notices for farmland values, the actual values are calculated by the state department of taxation.
Bowers explained a major reason CAUV values have gone up so much this year is because of sustained high crop values over the last three years. Though she said with rising operating costs, it’s getting harder for small farming businesses to keep up.
“When you also pile on an increase in your taxable value and ultimately your tax bill, I mean, it's definitely just piling, piling on,” Bowers said “ And it's very concerning for anyone, any small business and definitely for agriculture.”
Source: wyso.org
Photo Credit: istock-alenamozhjer
Categories: Ohio, Business