Taxes for farm land based on agricultural use, not fair market, value

For more than 40 years, the current agricultural use value (CAUV) program has been in effect in Ohio.Ohio voters approved a constitutional amendment in 1972 that allowed qualified agricultural land to be valued at its current agricultural use value rather than fair market value for real property tax purposes."The CAUV program was then implemented in 1975," said Roland Tkach, Huron County auditor.The Ohio constitution states (Article II, Section 36) that "laws may be passed to provide that land devoted exclusively to agricultural use be valued for real property tax purposes at the current value such land has for such agricultural use."The Ohio Department of Taxation calculates CAUV for each of Ohio's 3,500 soil types using a formula based on five factors. Huron County has 96 soil types, with the most prevalent being Bennington.Those five factors which determine the CAUV formula are:• Cropping pattern – based upon the acres of corn, beans and wheat compared to the total acres of those crops. These percentages are based on statewide averages.• Crop prices – based upon a survey of elevators in Ohio.• Crop yields – based on Farm Service Agency yields per acre for each soil type, adjusted for average yields across the state.• Non-land production costs – based upon farmer surveys by The Ohio State University.• Capitalization rate – based upon the interest rate for a 15-year fixed rate mortgage at Farm Credit Services, with 40 percent attributed to equity and 60 percent to debt.The county auditor is simply the administrator of the CAUV program.The county auditor has no authority to adjust CAUV soil values as they are issued as an order from the tax commissioner. Any appeal to the CAUV value is taken directly to the Ohio Board of Tax appeals rather than the county board of revision."If you want the CAUV formula revamped, the constitution says laws may be passed," Tkach said.The county auditor implements new CAUV values every three years, when the county undergoes a reappraisal or triennial update.The next reappraisal will be completed in 2018, with all values payable in 2019.According to the Ohio Revised Code, at any time after the first Monday in January and prior to the first Monday in March of any year, an owner of agricultural land may file an application with the county auditor of the county in which such land is located, requesting the auditor to value the land for real property tax purposed at the current value such land has for agricultural use, in accordance with rules adopted by the (tax) commissioner for the valuation of such land.Tkach