# Farm Taxes



## zogman (Mar 20, 2002)

This was in the GF Hearald today.
I don't know what to think. Agree? or Disagree? I'm going to think long and hard.

VIEWPOINT : Time for North Dakota to tax farms at their real value

By James Johnson

MANDAN, N.D. - Not long ago, I read a story reporting on the State Board of Equalization's opinions about property valuations and property tax. The story noted that former North Dakota Gov. George Sinner believes that increasing property tax bills may presage a voter revolt.

Sinner is correct. Grassroots groups of voters who are fed up with unreasonable property tax already are forming. Some of the board members said tax questions should be referred to the Legislature's Interim Finance and Taxation Committee for study. How many more years of study do we need? It's time for action.

When the Legislature is in session and the issue of funding and property tax comes up, our lawmakers' performance can best be described by the title of Hank Williams Jr. song, "Old Habits Are Hard to Break." Old habits guided by special interests over the past several decades have caused most of North Dakota's homeowners to pay some of the highest property taxes in the nation.

Special interest legislation that continues to have a major impact on today's homeowners became law in 1919. The 1919 law exempts all farm and ranch buildings from property tax.

This was an excellent law in 1919. Farm and ranch life was hard. There were few roads to travel on; vehicles were not dependable; homes were cold with no insulation; there was no electricity, no running water, no telephone.

Clothing was washed by hand on a scrub board. The Saturday night bath was taken in a wash tub. We will not forget how cold the outhouse was in midwinter. Farm children were educated in a one-room school. After completion of the eighth grade, most of the children went to work on the farm; few went on to high school.

The primary source of funding for the school came from lands provided by the federal government, and only a minimal amount of tax revenue was required.

But as years went by, life in rural North Dakota improved. The antiquated way of life became history. Modern homes were built complete with modern amenities. Children went on to high school and college. It became hard to differentiate between the rural homes and a home in the city.

The 1919 tax law had little to no effect. As rural property with buildings was bought and sold, the building value was reflected in the price of the land. True and full value was established by market value and the property was taxed accordingly.

From 1981 until 2004, more than 50 bits and pieces of special interest tax legislation was passed. The legislation with the greatest impact became law in 1981.

Prior to the 1981 legislative session, the standard of value for all property was market value. By law, all real property was in one class. The 1981 Legislature determined that agricultural property should not be part of this class, but that the true and full value of agricultural property be based on productivity as established through computation made by the North Dakota State University.

The NDSU computations then are forwarded to the state tax commissioner. From there, they are forwarded to the country director of tax equalization, and from there the information goes to the local assessor to determine the agricultural value.

The combination of the 1919 and 1981 laws have caused farm property to be taxed at only a fraction of its real value; that is, what a willing buyer will pay a willing seller for his or her property.

This method of taxation is excellent for those who share in grandpa's estate and for well-to-do out-of-state investors, who will pay almost anything for low-taxed North Dakota agricultural property and use it for a private hunting playground. But a farmer or rancher who would like to buy the land and use it for agricultural purposes is priced out of the market.

Agriculture is North Dakota's leading industry - but in 2004, all agricultural property (including homes and buildings) was valued at approximately $2 billion less than off-farm residential property. It is plain to see that our lawmakers have made some bad mistakes.

It is not uncommon for a ranch or farm, complete with a nice home and good farm buildings, to sell for more than $1 million and be taxed at about $1,000. A well-known example of this is the 5,225-acre ranch in western North Dakota that, earlier this year, the state considered buying for $3.5 million. The 2004 tax bill on the ranch was $1,960. A home in most of North Dakota's cities with a sales value of $150,000 will be taxed at $3,500 or more.

Our property tax system, loaded with special interests, is far from fair and equitable. It may well be time for North Dakota's taxpayers to stand up and fix what our legislators have messed up and do not have the guts to correct.

If all real property in North Dakota was taxed at only 1 percent of real and true value, our schools and local government would have more money to run on than they have ever had, and the tax system would be simple, equal and fair.

Johnson is a retired master sergeant in the U.S. Marine Corps.


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## buckseye (Dec 8, 2003)

I think he has his numbers screwed up... a quarter of land is anywhere from 250 bucks on up. There are four quarters in a section so a section of low quality land would still be a thousand a year the farmer pays. That,s just one section and there are thousands of sections of land. Say a farmer has 10,000 acres of decent land taxed at 400 a quarter that would be 62 .5 quarters x 400=25,000. To me that is some serious taxes.


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## ALLSUNND (Mar 24, 2005)

I AGREE,numbers are all srewed up,here in nc ND they are 800 dollars a quarter, 3200 a section, NOT CHEAP .....,,,, :eyeroll:


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## zogman (Mar 20, 2002)

Isn't the media in a form accurate and trustworthy anymore :eyeroll: 
I guess not...............


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## dogdoc (Oct 31, 2004)

I believe the ranch mentioned was listed with Federal Grassland Grazing lease. Only the actual deeded acres would be taxed if I'm not mistaken.
If it is the ranch I'm thinking of, only about 1000 acres were deeded acres.
The rest were Federal Grassland Grazing lease.

This would account for the "screwed up" numbers.

It looks like that article was written to stir up trouble without having all the facts.


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## bjorn (Jul 23, 2005)

R.E. property taxes can vary widely. I pay from $980 to over $1200 per quarter in SE, ND. This is famland. I live in town and my home taxes are around $1150.

I think they should have researched different areas of the state before the article.

bjorn


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## Dick Monson (Aug 12, 2002)

Am trying to remember back in the '50s when there was personal property tax on all farm goods, -- home, livestock, machinery, etc. The squak was that personal property tax hindered investment, so it was transfered over to land taxs for farmers. This was supposed to encourage them to buy and build. You will note the condition of rural farmsteads in states that *do* have a personal property tax versus those in ND. Part of the reasoning was-right or wrong- that urban folks are likely to invest in their home and assets like savings, CDs, funds, etc that are caught by income tax only. Whereas farmers pump the money into land and are taxed on it instead of the house. Farmers also get hooked on cap. gains and the income tax when they sell it. Am not a tax expert, this just from memory. One of the exclusions was that if a farmer was running a commercial business from the farmstead, that portion was taxed commercially-seed sales, welding shop-outfitting doesn't count of course. :wink:

Might a straight sales tax be the best way to equalitably spread the load? Property tax is gobbled up the school district and and thus the tax amount is far different in each district.


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## Plainsman (Jul 30, 2003)

Dick, I remember the county assessor coming around once a year back in the 50's. He always thought things were worth more than my dad thought. I do think my dad was right because this guy assessed things with a value more than my dad had paid for it a year before.

With all the spin on things one never knows what the truth really is. I have about 40 hours of college psychology and consider myself a good judge of character. After reading your posts for a long time you are definitely a selfless straight shooter, and I really am glad to have your opinions to help form mine. I have been off the farm for many years, and talk to many landowners today that put a lot of spin on things. I have a couple landowner friends that I trust, and they put things into perspective for me. Thanks for doing some of that on this site.

Your last post brought back memories and was a good history lesson in why things are the way they are.


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## g/o (Jul 13, 2004)

Dick, You remember about as much of the 50's as I do. We were both only knee high. If you run a commercial buisness on your farm that building or buildings are or should be taxed commercial. If you have nonfarm income that exceeds over 50% of your total income home is suppose to be taxed accordingly. Oh yes by the way I do pay commercial taxes on my lodging facilities on my farm.


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## Dick Monson (Aug 12, 2002)

g/o I'm sure you do, unfortunately many in the outfitting business don't. Which is especially unfair to you.


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## g/o (Jul 13, 2004)

Dick, I hardly got my shingle up and the assesor was there. Its up to the townships, I bet if someone put a lodge up in your township they would pay. Everyone in my area are paying as far as I know, how could someone let them go on this?


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## DJRooster (Nov 4, 2002)

I believe that the present method of taxation on farmland is fair as it stands. However, if we need to generate more revenue to fund the programs that we want to support or generate more income for our state and local government, we need to look at other sources of income besides land taxes so that we have a fair and equitable tax structure and not have one where a particular part of our tax base is paying an unfair amount. The best tax structure provides income from a variety of sources and does not come from a single tax. Sales taxes are unfair taxes for low income people who have to pay the same rate as others who have more ability to pay and because of this, I am not in favor of raising state sales taxes. Don't quote me on this but it seems to me that our income tax code has a special provision that provides some tax relief for farm income already. I'm not sure how it works and you can correct me if I am wrong because lets face it "my memory ain't what it used to be." It seems to me that most of the farms in this area are providing a nice amount of income for the people who choose to farm and I can't agree that in it's present form the taxes are excessive. There has been tremendous appreciation of land values and I don't know how this will affect the tax liabliity in the future. Some others can maybe explain that in a post. I am a taxpayer because I do own a section of farmland.


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## DJRooster (Nov 4, 2002)

I also like to keep in mind the services that those taxes provide. I don't mind paying the tax if I get good service for my money


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## DJRooster (Nov 4, 2002)

buckseye, if you have 10,000 acres of decent farmland as you stated in your example you can afford to pay the taxes you cited in your post.


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## swift (Jun 4, 2004)

DJ you say sales tax are not fair because those with low incomes have to pay the same as those with higher ones. What are you talking about. Folks with higher incomes aren't treated any better than anyone else. Are you saying that the Doctor that lives in the town should have to pay to have the streets done because he makes more than everyone else that uses those streets. The ONLY FAIR TAX is a FLAT TAX where everyone pays the same percentage.


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## DJRooster (Nov 4, 2002)

Swift, that is exactly what I said. A progressive tax is a fairer tax because those are the very people who can afford to pay. Why do you think there are exemptions for certain items in regards to sales tax? Why do you think that are different tax rates for income taxes? It is all based on the fact that progressive taxes are a more fair form of taxation despite what George W. would like to have you believe because he loves to shift the tax burden to the middle class. His track record speaks for itself. However, I think that we were originally discussing land taxes


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## headhunter (Oct 10, 2002)

Nothing "fair" about that there DJ......Everyone pays the same. Thats how it SHOULD be. The more money you make, the more YOU keep. The harder you work, the more money YOU keep. Its just asinine, in this country, the harder you work,the smarter you are, the more money you spend on college, the more "driven" you are, the more you get penalized. On the other hand, the less ambition you have, the lazier you are, the less you get educated, the more time you spend laying on the couch instead of working like a real man, and the less health insurance you buy because you spent all your money on a bigscreen TV, the LESS you pay the government, and the MORE you'll get back . I must quit before I puke. Hey DJrooster....Yeh....thats fair. good lord. uke:


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## headhunter (Oct 10, 2002)

PS,  :-?  :roll: uke:


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## Bert (Sep 11, 2003)

Times have changed. At one point in history, welfare served a purpose. Coming out of the depression, there were folks who needed welfare but were nonetheless ashamed to admit it. Now it has come to the point where it borders on sport to see just how big of a load you can be on society.
Taxes foisted on the rich were also a little more in line in the past because much of the wealth was directly or indirectly inherited. Now, there is no reason anyone cannot go to college and make somthing of themselves. It is going to cost me and my kids at least $150,000.00 for them to go to school. If I was broke, they could darn near go for free.
As it stands, we need somthing in this country, be it tax incentives or somthing else to get John Q. Burdon on the Public off his dead butt and become ambitiously employed.
Right now, the guy who works hard to get ahead is an idiot because the way the system works, he pays more taxes to support the lazy not to mention footing the bill for their medical needs through higher costs and insurance (A bigger hit than taxes if you do the math). 
I have had a belly full of looking at my pay deducts for health insurance and seeing people who wont work run to the emergency room for a bloody nose.
Sorry. This just struck a nerve.


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## Bert (Sep 11, 2003)

ps
I know this thread is about Farm taxes, my rant was about penalizing anyone who tries to do things the right way including Farmers.


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## ALLSUNND (Mar 24, 2005)

Bert :beer:


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## swift (Jun 4, 2004)

DJ What I said was equal percentage of taxes. Everyone pays X%. Then those that have more spend more therefore the rich are paying more, just like you want it. I don't know why you think someone that has more should pay more, so those that do less, can get more.

FLAT TAX is the ONLY FAIR TAX.


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## DJRooster (Nov 4, 2002)

Hey guys I respect your views but do not agree. You guys remind me of BobM!! If flat taxes are so great then they will probably replace our income tax struture but right now we evidently believe in a progressive tax. For all the simplistic reasons that were given why people are poor there are other reasons they are poor. I'm sure you have your views on New Orleans of which I don't think I care to hear. I believe what I say! But I am more interested in ideas on land taxes and how they are affected by appreciated land values.


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## Bert (Sep 11, 2003)

DJ

There are a variety of reasons why people are poor. What I am getting at is the rising number of second and third generation welfare cases who grew up understanding that way of life as being normal.
Society has created (with good intent) so many safety nets for people these days that it is nearly impossible to fall on you a$$ anymore.
Failure has become a word you wont even find in the dictionary pretty soon.
Without the fear of failure, and the ease at which one can make a living by watching Nascar or The NWA all day and having more kids, there is little to motivate some of these people to be a contributing member of society. 
Are there people who are down on their luck for one reason or another which is beyond their control? Sure there are. Is it pride that keeps them from using the programs in place to better themselves? I dunno. More and more I think it has come down to economics.

I go to college...have to put in 5 years...have to pay for it...have to get a job and work my way up...must pay higher taxes because I make more money. It is going to cost me an arm and a leg to send my kids to college but I have to because education is important in my house. I must pay higher insurance premiums to make up for those without insurance.

Its the way my dad taught me to live.

OR

I flunk out, get kicked out or quit high school. Sit at home and drink beer and smoke, get a welfare check or food stamps and play scratch and wins. I pay little or no taxes because I make little or no money. My kids could get financial aid and grants to go to college but they wont because education is not important in my house. I have no insurance to pay for but I still get treated at the hospital, clinic...and since it costs me nothing, I will go there for any and everything.

Its the way my dad taught me to live.

Both scenarios are stereotypical. A "P.C." person would probably have a cow over that. But like my grandma used to say... "screw em".

Who is to blame? The government? Like I said the intent of relief is noble. The people who willingly accept poverty as a way of life? Not if it is all they know.

I dont have the answer, but I do acknowledge that the problem does exist.


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## R y a n (Apr 4, 2005)

Nice posts Bert :beer:

Your thoughts are spot on accurate. I'm constantly amazed that this growing sentiment that is shared by you and I and many others is not shared by more and more politicians. I simply cannot believe that they are not fed up too....

Why then are they not doing anything about it? The welfare types are paying their special interest PAC's .... rather ...wealthier interests are contributing to political coffers...

You would think this would be the start of a huge ground swelling of support by those sick and tired of this growing welfare generation?

Benelli


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## Bobm (Aug 26, 2003)

> You guys remind me of BobM!! If flat taxes are so great then they will probably replace our income tax struture but right now we evidently believe in a progressive tax.


I never, ever, advocated a flat tax, some people are just to stubborn to research things and know the difference. They have an uniformed opinon and byGod they will never change it, or even listen to other possibilities. The tax system I advocated is the only one that relieves your precious poor of all fed income taxes, all of them, of course you would know that if you would take the time to study it.

And for everyones info our current income tax system started as a flat tax, we all know how that ended up.

I purposely stayed out of this conversation because I don't know anything about farm taxes

for anyone who is interested in being informed

http://www.fairtax.org/pdfs/SampleTaxRe ... irtax.org'

try reading


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## DJRooster (Nov 4, 2002)

I think your are dead wrong to blame the people who are on welfare for their own demise. But don't fault those that need it because others are abusing the system. I will agree that poverty crosses generations. It is not an easy hill to climb and I know you are thankful because your dad taught you well but suppose your dad did not teach you well? And what about the children that are growing up in that environment? Many of the programs we have are desgned with them in mind. I think what you mean is that there is room for improvement with the management of the welfare system. Of course there is abuse of most government programs but that is the fault of the system not the fault of those that need the program. This is a forum about farming and quite frankly there is no system that has been abused more than the federal crop insurance program. Money makes people do strange things and the abuse of the MPCI program is rampant but some people seem to justify it because it is the family farm. It becomes a game of not how to use the system but to abuse it. A con is a con no matter what the game may be. Please don't fault the users because of the abusers.


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## Bert (Sep 11, 2003)

Dj

Did you read my whole post? I said that the blame for the problem is not easy to hang on any one entity nor can one throw a blanket over the whole issue because each situation is different.

However, in my line of work, I see first hand the abuse of systems, programs and advocacy groups. I see that there is a lawyer behind every tree (they even advertise on TV, ususally during the Jerry Springer show or one of the "Peoples Court" type of excuse for entertainment).

Face it, we have become a lawsuit society with a "whats in it for me" mentality instead of "its my fault and I am ashamed of myself or my situation".

Do I begrudge the young single mother who grew up in poverty using food stamps to buy milk for the kids? Hell no!

Do I personally know 40 year old men who more or less fake a job related injury to collect money for nothing and spend it on various forms of vice? Hell yes I do!

Like I also said, these programs and advocacy groups started out with the right intentions but in doing what was best for a few opened the door for a lot of folks who do not need or deserve the services.

I dont know who is omnipotent enough to sort out which is which but there are those in todays society, bleeding heart folks with too much time on their hands who believe that every kid in school with the alphabet behind their name and every poor soul who is on workmans comp. and everybody who cant afford insurance but enjoys medical attention... need not be accountable for anything.

I dont think any of that is dead wrong. I think it is fairly accurate.


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## swift (Jun 4, 2004)

DJ you say a mouthful when you say 'It's not their fault it's the system' There is too many liberals out there telling every dirtbag it's not their fault. What happened to self respect and being accountable for yourself. The welfare system should not enable people it should be a short term helping hand. As you can figure out I am conservative and as I will never change your mindset of entitlement you will not change me to think people should get something for nothing.


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