txags92 said:

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You and I read that differently. To me, that reads that in any given year, in order to quality for an ag valuation, the property has to have been used for ag at the minimum intensity in at least 5 of the last 7 years. As long as at least 5 of the previous 7 meet the minimum intensity, the property qualifies for Ag valuation. I have never heard of any appraisal district anywhere attempting to change the valuation on somebody based on a single year below the minimum intensity when they still meet that history and intensity requirement.

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Your last sentence is conflicting let's assume we are in year 2021 and I have 50 acres and 10 cows and have had this property like this for 5 of the last 7 years

The minimum degree of intensity is 50 acres and 10 cows for the county I'm making up

Next year I only have 3 cows, cows are stupid and take to much tile with feed, fence, vaccinations, dumb bulls, and dumb mommy cows. Does:


1) the property have a change of use imposed pursuant to sec 23.55? No the property it is still being used for Ag


2) this year count as a history year? Yes it does because it's still being used for Ag


3) the property meet the minimum degree of intensity generally accepted for the area? NO, the minimum guidelines state I need at 10 cows. Since the property does not meet the definition pursuant to sec 23.51 the land is valued at market value.

This information can also be corroborated with the comptroller Ag manual
https://comptroller.texas.gov/taxes/property-tax/docs/96-300.pdf



Now how does the CAD know you don't qualify? It's hard to prove. Because people will lie if it means a 99% tax savings. But when you fill out an Ag app you are swearing that what you say is the truth punishable by law. And in sec 23.54(e) you are supposed to notify the CAD when eligibility ends. Also Sec 23.54(j) says if you get caught lying you can be back taxed for 5 years.

So what you are saying is that you met minimum intensity of Ag for only 5 of previous seven years and then you have another year where you don't meet minimum intensity? Then your current seven year history has 3 years without meeting the minimum, unless one of the previous 2 was in year 1 of the 8. What happens in any 1 year does not matter at all if you already have an Ag valuation. All that matters is that the primary use is Ag and you meet the minimum intensity in at least 5 of the most recent 7. At the point where you have the 3rd year below minimum out of the last 7, that is where the appraisal district can go after you.

And the reality is that they don't have to prove anything. If they think you are not meeting the minimum, they can tell you they are planning to yank your Ag valuation unless you prove you met the minimum. That is why keeping records of EVERYTHINg is so important. You have to prove you did it, not the other way around.

Look

I've laid out the tax code and comptroller Ag manual and described it in pretty simple terms.

So good luck if you ever have to try to explain to a group of people why you should get Ag if you don't meet the minimum degree of intensity.

I have a pretty firm grasp of this subject and you don't.

Just for grins, why don't you call a handful of CAD's and ask them can you still qualify for an Ag exemption if you don't meet the guidelines. Then report back to class with your findings

agstudent said:

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Our neighbor has been running cattle on our place for the past couple of decades. He's decided to get out of the business and now I have to figure out what to do to keep the ag exemption on ~800 acres in Comanche county. What is the easiest solution? Do I just need to figure it out by the end of the year or is there a minimum amount of time required?

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Just like you can allow people to run cattle on your land for the Ag exemption, you can also allow people to come cut and bale hay periodically on your property.

You can either charge them, or consider your payment the Ag exemption and the mowing of your (giant) lawn. Hope this helps!

Fainting goats.

Fishin Texas Aggie 05 said:

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Look

I've laid out the tax code and comptroller Ag manual and described it in pretty simple terms.

So good luck if you ever have to try to explain to a group of people why you should get Ag if you don't meet the minimum degree of intensity.

I have a pretty firm grasp of this subject and you don't.

Just for grins, why don't you call a handful of CAD's and ask them can you still qualify for an Ag exemption if you don't meet the guidelines. Then report back to class with your findings

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There may be some hardnosed (and wrong) CADs that take that interpretation, but most don't. We lease our place for cattle. After the drought in '10 and '11 we let the pasture rest for two years. Nothing on it. No problem with maintaining the ag exemption.

Why are they wrong because they are hard nosed?

Droughts are a non issue because if the governor declares a drought additional protections stop the removal of ag.

Also the words prudent and typical show up a lot in the verbiage

Martin Cash said:

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Fishin Texas Aggie 05 said:

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Look

I've laid out the tax code and comptroller Ag manual and described it in pretty simple terms.

So good luck if you ever have to try to explain to a group of people why you should get Ag if you don't meet the minimum degree of intensity.

I have a pretty firm grasp of this subject and you don't.

Just for grins, why don't you call a handful of CAD's and ask them can you still qualify for an Ag exemption if you don't meet the guidelines. Then report back to class with your findings

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There may be some hardnosed (and wrong) CADs that take that interpretation, but most don't. We lease our place for cattle. After the drought in '10 and '11 we let the pasture rest for two years. Nothing on it. No problem with maintaining the ag exemption.

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Interestingly enough, I just read the Comanche County AD's guidelines, and they state that once you have the ag valuation, you must meet the degree of intensity test every year. They state that decreasing the intensity will not cause you to lose the valuation, but completely ceasing ag use for a full year will. That is the first time I have seen that specification and it seems like it contradicts the 5 in 7 language that is in the state regulations. They don't list drought or any other exemptions that would allow you to stop ag use for a period of time. That seems like a good way to overgraze or overfarm the land if it is never allowed to rest, and trying to tax landowners of exhausted land at full property value if they rest it for a year seems like a great way to bankrupt people.

txags92 said:

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texag_89 said:

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If your fences will do it, I would do Spanish goats or dorper sheep.

Otherwise, I bet the is a good Ag here in that area or knows of someone reliable that could run a few cows to help you out.

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If they have just been running cattle up until now, I highly doubt the fences would be suited for goats. 3 strand barbed wire won't keep goats in at all. Goat panel fencing is not cheap, but without it, you aren't keeping goats in.

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I keep goats in with 5 strand and a REALLY hot bottom hotwire. Keeps goats in and hogs out!

txags92 said:

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You and I read that differently. To me, that reads that in any given year, in order to quality for an ag valuation, the property has to have been used for ag at the minimum intensity in at least 5 of the last 7 years. As long as at least 5 of the previous 7 meet the minimum intensity, the property qualifies for Ag valuation. I have never heard of any appraisal district anywhere attempting to change the valuation on somebody based on a single year below the minimum intensity when they still meet that history and intensity requirement.

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this is how our county reads it. you can pull it out of production for a period to rest or "reset" your operation.


Each is different

cavscout96 said:

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txags92 said:

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texag_89 said:

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If your fences will do it, I would do Spanish goats or dorper sheep.

Otherwise, I bet the is a good Ag here in that area or knows of someone reliable that could run a few cows to help you out.

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If they have just been running cattle up until now, I highly doubt the fences would be suited for goats. 3 strand barbed wire won't keep goats in at all. Goat panel fencing is not cheap, but without it, you aren't keeping goats in.

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I keep goats in with 5 strand and a REALLY hot bottom hotwire. Keeps goats in and hogs out!

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Yeah, I almost said that the only thing that would work besides goat panel would be a hot lower wire. Even with goat panel, they are constantly trying to stuff their heads through the bottom of the fence to get to the ditch weeds.

txags92 said:

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Martin Cash said:

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Fishin Texas Aggie 05 said:

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Look

I've laid out the tax code and comptroller Ag manual and described it in pretty simple terms.

So good luck if you ever have to try to explain to a group of people why you should get Ag if you don't meet the minimum degree of intensity.

I have a pretty firm grasp of this subject and you don't.

Just for grins, why don't you call a handful of CAD's and ask them can you still qualify for an Ag exemption if you don't meet the guidelines. Then report back to class with your findings

---

There may be some hardnosed (and wrong) CADs that take that interpretation, but most don't. We lease our place for cattle. After the drought in '10 and '11 we let the pasture rest for two years. Nothing on it. No problem with maintaining the ag exemption.

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Interestingly enough, I just read the Comanche County AD's guidelines, and they state that once you have the ag valuation, you must meet the degree of intensity test every year. They state that decreasing the intensity will not cause you to lose the valuation, but completely ceasing ag use for a full year will. That is the first time I have seen that specification and it seems like it contradicts the 5 in 7 language that is in the state regulations. They don't list drought or any other exemptions that would allow you to stop ag use for a period of time. That seems like a good way to overgraze or overfarm the land if it is never allowed to rest, and trying to tax landowners of exhausted land at full property value if they rest it for a year seems like a great way to bankrupt people.

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I have never seen a CAD apply the statute in the manner described FTA05 is describing.

Each is different. I would imagine those counties with or proximate to major metro areas take a more hardline approach than others.

txags92 said:

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cavscout96 said:

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txags92 said:

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texag_89 said:

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If your fences will do it, I would do Spanish goats or dorper sheep.

Otherwise, I bet the is a good Ag here in that area or knows of someone reliable that could run a few cows to help you out.

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If they have just been running cattle up until now, I highly doubt the fences would be suited for goats. 3 strand barbed wire won't keep goats in at all. Goat panel fencing is not cheap, but without it, you aren't keeping goats in.

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I keep goats in with 5 strand and a REALLY hot bottom hotwire. Keeps goats in and hogs out!

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Yeah, I almost said that the only thing that would work besides goat panel would be a hot lower wire. Even with goat panel, they are constantly trying to stuff their heads through the bottom of the fence to get to the ditch weeds.

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i also rotate them around so they have plenty to eat. Also, and probably more importantly, I don't have any neighbors with goats for several miles. No worries about Billy's out hunting for some action or fighting through fences.

txags92 said:

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cavscout96 said:

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txags92 said:

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texag_89 said:

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If your fences will do it, I would do Spanish goats or dorper sheep.

Otherwise, I bet the is a good Ag here in that area or knows of someone reliable that could run a few cows to help you out.

---

If they have just been running cattle up until now, I highly doubt the fences would be suited for goats. 3 strand barbed wire won't keep goats in at all. Goat panel fencing is not cheap, but without it, you aren't keeping goats in.

---

I keep goats in with 5 strand and a REALLY hot bottom hotwire. Keeps goats in and hogs out!

---

Yeah, I almost said that the only thing that would work besides goat panel would be a hot lower wire. Even with goat panel, they are constantly trying to stuff their heads through the bottom of the fence to get to the ditch weeds.

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I've tried to get my old man to put up some hotwire since his tear up panels and net wire like nobody's business. He has a hard time getting good grounds though with really rocky soils.

What do y'all do with the goats? Sell them at the Indian halal markets?

My FIL is out between Boerne and Bulverde. He either sells his to a couple of hispanic guys that come around from time to time that do Cabrito for parties and events or he takes them over to a livestock auction in Fredricksburg. Prices have been pretty good at auction lately.

cavscout96 said:

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txags92 said:

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cavscout96 said:

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txags92 said:

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texag_89 said:

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If your fences will do it, I would do Spanish goats or dorper sheep.

Otherwise, I bet the is a good Ag here in that area or knows of someone reliable that could run a few cows to help you out.

---

If they have just been running cattle up until now, I highly doubt the fences would be suited for goats. 3 strand barbed wire won't keep goats in at all. Goat panel fencing is not cheap, but without it, you aren't keeping goats in.

---

I keep goats in with 5 strand and a REALLY hot bottom hotwire. Keeps goats in and hogs out!

---

Yeah, I almost said that the only thing that would work besides goat panel would be a hot lower wire. Even with goat panel, they are constantly trying to stuff their heads through the bottom of the fence to get to the ditch weeds.

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I've tried to get my old man to put up some hotwire since his tear up panels and net wire like nobody's business. He has a hard time getting good grounds though with really rocky soils.

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We are a few months away from switching over to wildlife valuation just to relieve the workload for my FIL. He is not far from turning 80. He will probably still run a few goats just to keep himself busy, but he won't have to maintain the herd size to satisfy the Comal minimum intensity anymore.

Y'all may disagree with my black and white posting of the Tax code. That's cool.

Just don't cry foul if you are ever held to the standard it requires because other counties don't follow it as closely as they should.

How do the decide the ag value? Obviously a feedlot or vineyard generates more cash flow per acre than a handful of goats. Is it based on actual ag use or some common value?

Fishin Texas Aggie 05 said:

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Y'all may disagree with my black and white posting of the Tax code. That's cool.

Just don't cry foul if you are ever held to the standard it requires because other counties don't follow it as closely as they should.

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I didn't say I disagreed. I said I've never seen it applied like you've described.

K_P said:

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How do the decide the ag value? Obviously a feedlot or vineyard generates more cash flow per acre than a handful of goats. Is it based on actual ag use or some common value?

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Ag values are calculated using a fairly complex formula

If you take then income formula of I = R * V then the variables are (I) = income (R) = cap rate and (V) = the value, so since we are solving for V we divide the I and the R

Cap rates can be tricky but the tax code gives the cap to be used and it's going to be 10% for a while. The cap rate can be found in sub chapter D of chapter 23

The income is the fun part. We are in 2021 the Ag values for 21 will be a 5 year average of the net to land excluding the previous year. Statutorily you must have a category for dry and irrigated crops, improved and unimproved pasture, and waste. No where are the pasture types defined because each county will have what's typically found in it. So let's use unimproved pasture as an example. First we must find the net to land. The net to land is the profit minus expenses. Now this isn't income the rancher is making but it's the income the landowner would make. That's typically found using cash lease data turned into the CAD, which is very little.

So let's say that the pasture leases for $12.50 /ac. To make things simple let's not include any secondary income from hunting, ecotourism, etc. So the net income would be $12.50 /ac.

Now as the landowner you have certain expenses but not all are allowed. For sure you will pay property taxes and you do have some overall management of the property. Now I'm some parts of the world. The landowner gets his money and he's done. But some landowners will help will brush control and fence maintenance. Although those are becoming less common and in the actual leases I'm seeing all the work falls on the tenant. But let's say the allowable expenses are $5.50 /ac.

So $12.50 ~ $7.50 = $5 and that would be the net to land.

To make things easy let's say the net to land from 2015-2019 averages out to $5.

So we know the (R) as proscribed by the tax code and we have just found (I). So the Ag value would be $50 per acre.

But remember this isn't what and owner/operator makes this is just valuing the land.

Now row crop land can be valued by shares and if you think this is TDLR it would take at least this many words to describe how to calculate shares.


Finally this is not personal income tax for your operation. It taking the typical cash lease for a category and backing out typical expenses.

Interesting, thanks for the explanation. I am getting more involved with my grandmothers property and just curious how it all works.

Would bees work? Especially if you have tallow, beekeepers usually want places to set them up.... a thought anyway

No

The property is over 20 acres

The tax code only allows for a property to qualify of its between 5-20 acres dedicated to an apiary

Had no idea on that one, just an idea!