Tax rates to be based on production potential

Thursday, January 21, 2010

New property tax rates formulated by the Missouri State Tax Commission will change the assessed valuation of farmland based on its production potential statewide. The Missouri Farm Bureau is opposing the proposal as a tax increase, while the net effect in the bi-county area would be a drop in tax rates.

The Missouri State Tax Commission's new tax rates on farmland replaces old rates that have stood for many years. Rates are used to calculate taxes based on evaluating the land's potential agricultural earnings.

Missouri's farms are divided into eight grades based on land quality. The best farmland is listed at Grade 1. The tax commission increased the productive value of farms in the top four categories----which are generally cropland----reducing the values for the next three lower categories and leaving the lowest category unchanged.

The Missouri Farm Bureau has urged the tax commission not to increase the productive value of agricultural land, and says it will ask lawmakers to reject the proposed changes.

"Missouri farmers are carrying some of the highest debt load in the nation, and clearly they cannot be expected to shoulder a tax increase," said Farm Bureau President Charles Kruse. "As we stated to the State Tax Commission, many Missouri farm and ranch families are facing financial strain like they have never seen. Extreme market volatility combined with record production expenses, unusually wet weather and weak demand have left many producers struggling to manage debt and cash flow."

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