Texas LAND Spring 2013

FEATURE ARTICLE
U n d e r s t a n d i n g
R u r a l P r o p e r t y T a x e s
description and the owner’s name and address. The appraisal district must
appraise each piece of property within the county at least once every three years.
Qualified agricultural land appraisals are based on the land’s capacity to produce
agricultural products, including timber, rather than its market value. Two different
provisions of the Texas Constitution address qualifications for agricultural
appraisal. Article VIII, Section 1-d, defining agricultural use, requires you to
show farming or ranching as your primary occupation and source of income.
Very few property owners qualify under this provision. Nearly all land receiving
agricultural appraisal falls under Article VIII, Section 1-d-1, also known as openspace
valuation.
Open-space land appraisal
According to the Texas Comptroller of Public Accounts, “property owners may
qualify for open-space valuation if land meets the following criteria:
During my five year tenure on the Williamson County Appraisal Review Board,
it became very apparent that many people don’t understand the Texas property
taxing process, particularly of rural lands. Although the Texas Comptroller of
Public Accounts has published several well-written publications on property
taxes, the process is not easily understood unless you have been involved with it.
Property taxes are assessed and collected under the authority dictated by
the Texas Property Tax Code which was developed and enacted by the State
Legislature. Overall responsibility for administrating the Texas Property Tax Code
was delegated by the Legislature to the Texas Comptroller of Public Accounts.
Taxes are assessed on two types of property, real and tangible personal. Real
property includes single-family and multi-family residential, vacant platted lots,
agricultural open-space land, commercial/industrial, pipelines, minerals, and
farm improvements. Tangible personal property is business or manufacturer
inventory, furniture, fixtures and equipment. Intangible personal property, such
as goodwill, patents, bonds, copyrights, contracts and brand names, is not taxed.
The primary focus of this article is the taxing of agricultural open-space land.
The system
As explained in 2012 Property Tax Basics published by the Texas
Comptroller of Public Accounts, “Each Texas County is served by an appraisal
district that determines the value of all of the county’s taxable property. Generally
local government that collects property taxes, such as the county, cities and
school districts, is a member of the appraisal district. A board of directors
appointed by the member governments presides over the appraisal district.”
The appraisal district board of directors hires a chief appraiser, approves contracts,
sets policy, names members of the appraisal review board and confirms members
of the agricultural advisory board. In larger counties, it also names a taxpayer
liaison that works directly under the board and fields taxpayer questions.
Each year before appraisals begin, the appraisal district compiles a list of
taxable property in the county. The listing for each property contains a property
• The land must be devoted principally to agricultural use, including crop
production, livestock, poultry, fish or cover crops. Land can also be left
idle for a government program or for normal crop or livestock rotation.
Land used for raising certain exotic animals to produce human food or
other items of commercial value qualifies. Cutting wood for use in fences
or structures on adjacent agricultural land qualifies as well.
• Agricultural land must be devoted to production at a level of intensity
that is common in the local area.
• The land must have been devoted to agricultural or timber production for
at least five of the past seven years.
Production level intensities for each county are recommended by the appraisal
district’s agricultural advisory board. One of the agricultural advisory board
members must be a representative of the United States Department of
Agriculture’s Farm Service Agency. The rest of the members must own land
within the district that qualifies for an agricultural appraisal and have been a
resident of the district for at least five years.
When buying land for agricultural purposes, it is very important to determine
whether the current owner has an active agricultural appraisal on the property.
This information can be verified by contacting the appropriate appraisal district.
If a piece of land is purchased with an agricultural appraisal, the buyer should go
to the appraisal district and have the appraisal transferred to the new owner. The
necessary use intensity has to be continued by the new owner to maintain the
agricultural appraisal. Field checks are made periodically by district appraisers to
ensure that the property remains in compliance.
AGRICULTURAL land used for wildlife management
For land to be eligible for special wildlife assessments, it must be appraised for
agricultural use during the year prior to changing to wildlife management. To
qualify for wildlife management appraisal, a wildlife management plan must be
completed, approved by the appraisal district and in the first stages of execution
before converting from agricultural production to wildlife management. Most
appraisal districts require that the plan be submitted on forms supplied by the
Texas Parks and Wildlife Department or contain the information requested on
22 SPRING 2013