1. State Programs for the Differential Assessment of Farm and Open Space Land. Agricultural Economic Report No. 256.
- Author
-
Economic Research Service (USDA), Washington, DC., Hady, Thomas F., and Sibold, Ann Gordon
- Abstract
Property taxes relate directly to rural education finance. This bulletin discusses differential tax assessment laws and the reasons states choose to institute them in 1970s. The first part of the report discusses the different types of tax laws and offers available evidence of their effects. More detailed summaries of individual state assessment laws are offered in the second section. (An addendum to the document shows the kind of state differential assessment law, if any, being used by each state as of January 1, 1977.) Differential assessment laws, currently used in 31 states, can be classified into three general categories: preferential assessment, deferred taxation, and restrictive agreements. A preferential assessment law, used in nine states, is one in which land is valued according to its current use. No penalty is exacted if the land is later converted to another use. A deferred tax law, used in 18 states, is also one in which land is taxed according to current use value, but a penalty is levied if the land use changes. A restrictive agreement, used in 10 states, occurs when the landowner and the local government agree to restrict use of the land in return for differential assessment. Assessment laws typically are instituted for one of two reasons: to reduce perceived inequities in the application of property tax to farms or to influence land use. The three assessment approaches defined here are compared, evaluated, and discussed in the context of the problems to which they respond. (TES)
- Published
- 1974