Income tax credit for ag land property tax proposed

Farmers and ranches would receive a credit for property taxes paid on agricultural land under a bill heard by the Revenue Committee March 3.

LB428, introduced by Bellevue Sen. Abbie Cornett, would provide a refundable income tax credit to taxpayers who are actively engaged in agricultural operations and have at least $50,000 in adjusted gross income from agricultural operations, and no more than $50,000 in adjusted gross income from non-farm sources. The credit would be equal to the difference between property taxes paid on agricultural property and 10 percent of the taxpayer’s adjusted gross income from agricultural operations.

Historically, property tax relief measures have benefited agricultural land owners equally, Cornett said. She said property tax relief does not necessarily result in what farmers and ranchers want: lower land valuations.

“If property taxes are reduced for all owners of agricultural land, people who make their living on the land will continue to compete with outside agricultural land purchasers,” Cornett said. “Both will benefit from lower taxes, but the relative cost of buying, owning and growing fields in Nebraska will stay the same.”

Cornett said her bill would provide property tax relief to people who work the land, which would improve the agricultural economy without raising agricultural land values.

No one testified in support or opposition and the committee took no immediate action on the bill.