Fighting For The Underdogs In Commercial Property Tax Appeals

The valuation of agricultural lands varies drastically across the Upper Midwest. Minnesota agricultural values rely primarily on market data derived from land sales, but agricultural areas in the Twin Cities area may qualify for a special program called “Green Acres.”

What is the Green Acres Tax Program?

Green Acres is the name of the Minnesota Agricultural Property Tax Law, first passed in 1967. This law allows for qualifying agricultural property to be valued using the property sales data of land outside of the Twin Cities metropolitan area.

The law lowers the property tax value of many metro-area agricultural properties so that farmers are not priced out of the region due to inflated property values.

Green Acres status can also be beneficial for developers who want to minimize their property tax liability before they actually begin developing agricultural lands.

How are Agricultural Property Values Assessed in the Upper Midwest?

The Minnesota Department of Revenue recently surveyed the property tax laws of several neighboring states and found that our neighbors tend to rely more heavily on data other than market sales when determining the taxable value of agricultural property.

Here are brief overviews of how agricultural property valuations occur in the states surrounding Minnesota:

  • Iowa uses a somewhat complicated method of evaluating the productive and net earning capacity of agricultural property to set land values. Tax assessors look at the five-year average of total farmland acres growing certain crops, landlord expenses and soil surveys, among other things.
  • North Dakota values its farmland using capitalized average gross returns. For farmland the average gross return is based on the income from crops and a share of government payments. For non-croplands, the carrying capacity of rangeland is used. There is also an exception for inundated agricultural land and assessors can take soil quality into consideration.
  • South Dakota takes a “productivity value” approach to valuing agricultural land. This value is derived from gross revenues and landlord share percentages divided by the capitalization rate. Productivity values are determined on a per-acre basis and vary between counties.
  • Wisconsin determines the tax value of its agricultural businesses based on income generating potential. This value is primarily based on rental incomes and does not take into consideration the land’s actual use, but potential use. This means that great cropland used for pasture is valued as cropland.

Which Valuation Method is Better?

It’s hard to say whether one state’s method of valuation property tax values is superior to another’s. The benefits of the market-based approach that Minnesota uses is that a property tax attorney can make sure that agricultural property is assessed for the rate that the property could actually sell for. Improvements to agricultural property or issues such as pollution can also be used to challenge an improperly inflated property valuation.

Midwest Agricultural Property Tax Help

The team at Robert Hill Law has helped countless Upper Midwest farmers, manufacturers and companies lower their property taxes during the past 20 years.

In helping clients obtain accurate property tax valuations, attorney Robert Hill has assisted all types of businesses save millions in taxes. Learn whether you can reduce your property bill by contacting Robert Hill for a free assessment.