You did not miss any sarcasm. And for others, I never said he broke any law. But he is certainly gaming the system by exploiting an exemption for something other than it's intended purpose. And he has every right to do so.
Quality tax policy is developed to provide revenue to pay for necessary services. We can argue all day over what those services should be, or whether the exemption or credit is really a laudable purpose, but that is a topic for another day (and another forum). And then to provide tax incentives and/or exemptions for legitimate purposes. In this particular instance the legislature and local units of government chose to provide an agricultural exemption for legitimate agricultural purposes. The fact that this individual is looking to buy a couple of longhorns, and do it fast, proves to me that this is not a legitimate ag enterprise. Rather it is an attempt to shoehorn his recreational, or investment property, into a loophole intended for legitimate agricultural enterprises.
The outcome of gaming the system like this means that the existing property tax system doesn't raise the revenue that it is needed to pay for the core identified services. That means that property tax rates on other properties must be raised in order to generate that necessary revenue. So by individual A using a loophole to reduce his tax liability then he essentially raises taxes on all of his neighbors to pay for his reduction. Or more likely at this point in the system, state/local government know that non-ag entities will find a way to (barely) meet the ag exemption, so they set the property tax artificially high to account for that lost revenue.
So two groups of people here should be upset in my mind. (1) all other property tax payers; & (2) legitimate agricultural producers. ...because if enough people do this (and they do) then it potentially endangers the continued existence of the ag exemption itself.
This is very similar to the commercials you see on late night TV... "Owe the IRS more than $20,000?? You don't have to pay it! We can settle for pennies on the dollar!" What that means in reality is that people with actual tax burdens who don't pay simply shift that burden to other law-abiding citizens. Or people who buy items online and do not pay their state/local use tax (<-- only those people actually are breaking the law).
From the Texas Comptroller Ag Qualifications Document
Quote:
What kind of special consideration? For example, the total property tax bill for a 100 acre tract of
non-agricultural land in the Lockhart Independent School District worth $2,998 per acre in 2012
would be $3,558.03. The tax on 100 acres of open native pasture land that qualifies for agricultural
appraisal would be $83.08.
So there is great incentive for a property owner in the Lockhart ISD to gain an agricultural exemption. ...but it shifts almost $3500 in tax burden to other properties, or takes $3500 away from local schools and roads.
