How to become Ag Exempt in Texas!
One of the most common questions I am asked is: "Is this land ag exempt?" If the answer is no, the follow up is, "How do I become Ag Exempt?"
Buying beautiful, grassy land in Texas hold opportunities for ranching, farming, and in the long run, saving lots of money. Whether you raise agricultural products for the purpose of selling them, keep bees, or even run a veterinary business for ranch and farm calls, you have the opportunity to get your land Ag exempt, which could knock thousands of dollars off of your property taxes.
The qualifications for land to be Ag exempt include: the land must be in use currently, and for agricultural purposes, which must be the main purpose of the land, the land must be used to the intensity of other land in the area, it must be devoted primarily to agricultural use for five of the preceding seven years, the property owner must file a valid application with the appraisal district and reapply every five years unless otherwise told.
Under Article VIII, section 1-D-1, the owner of the land does not have to make their living off of the land, and their primary occupation does not have to be farming or ranching. The Tax Code defines agriculture as: “cultivating the soil, producing crops for human food, animal feed or planting seed or for the production of fibers; floriculture, viticulture, and horticulture; raising or keeping livestock; raising or keeping exotic animals for the production of human food or of fiber, leather, pelts, or other tangible products having a commercial value; and planting cover crops or leaving land idle for the purpose of participating in any governmental program or normal crop or livestock rotation procedure and wildlife management.” Some activities that would not qualify include, harvesting native plants, hunting native wild animals such as deer or turkey, and processing activities that take place after the crop or animal has been harvested such as slaughter operations or cotton ginning.
There are minimum numbers of average and amount of agricultural produce required to qualify as well. Properties with less than 10 acres generally will not qualify. Depending on the county, you may need one animal unit per 5-10 acres of improved land, and the animal units are as follows (for Wise County, and these requirements are similar in the surrounding counties. Please call your local tax assessors office for your county's specific requirements):
1 - Cow & Calf = 1 animal unit
1Bull = 1 ½ animal unit
1Horse = 1 animal unit
6Sheep or goats = 1 animal unit
2Miniature horses or donkeys = 1 animal unit
Chickens and Pigs can qualify depending on how they are being used.
In order to apply, you will need a basic description of your business, including the name, description and address, your social security number, and if your business is registered with the Texas Secretary of State (SOS), you will need your SOS file number. Then you can either apply online or on paper.
For More in depth information, visit https://comptroller.texas.gov/taxes/ag-timber/