Category Archives: 2010-4

“Ag Exempt” Status

These days it seems that taxes of every kind are on the rise, regardless of where you live, so it is not surprising that people are looking for ways to reduce their tax liabilities. While tax codes vary greatly from state to state and even county to county, here in Texas, many people are looking at Miniature Herefords as a way to gain or maintain an “Ag Exemption” on their property. These tax exemptions have become especially important as the sprawling ranches and farm lands are replaced with urban development and smaller acreage “ranchettes”. This “Ag Exemption” may result in a significantly lower property tax bill each year based on certain land use requirements but there are some factors one must consider (and stiff penalties!).

DOES MY PROPERTY QUALIFY?
The most common “Ag Exemption” in Texas is actually not an agricultural exemption per say, but rather an exemption based on the ‘Open-space Appraisal 1-d-1’. This land appraisal method has three primary requirements:
the land must be primarily dedicated to agricultural use consistent with generally accepted practices in the area (relatively broad)
during 5 of the preceding 7 years, the land has been dedicated to agricultural, timber or forest production
the necessary form(s) must be provided to the appraisal office prior to May 1 for evaluation
The key word in the “Open-space Appraisal” method is agricultural USE. This can be defined as crop planting/production, raising livestock or exotic animals, wildlife management or land devoted to horticulture type use. With this type of exemption, the landowner’s primary business or occupation is not a factor, as the primary purpose of the exemption to preserve open space.

In Montgomery County, Texas, the minimum acreage requirements can vary based on the use, density, etc but when it comes to raising livestock, 20 acres is the minimum required for an exemption. The number of livestock head required varies (depending on type, breed, etc) and should be determined with your appraiser. However, one of the many attractions to raising Miniature Herefords is their efficiency (and easy keeping!) makes this type of exemption extremely viable on smaller acreage.

While commonly referred to as an “ag exemption”, the open-space appraisal differs greatly from a true “agricultural exemption” which is known as ‘Agricultural Use Appraisal 1-d’. This method requires that the primary occupation and income of the landowner be based on agricultural production. The land must be devoted to agriculture as the value of the land, and subsequent tax assessment, is based on the revenue associated with the property and its ability to produce agricultural products. Market value is not a consideration. An agricultural exemption must be applied for annually, whereas an open-space exemption remains in place until the use or category changes.

PENALTIES AND ROLLBACK TAXES….BEWARE
In either case, a landowner should contact their local county appraisal office for the specific regulations and requirements within their county (and state). A landowner should also be aware of the penalties associated with incorrect reporting and “rollback taxes”. Rollback taxes are applied when a change of use occurs on property previously under either ag related type exemption and include the past 3-5+ years of taxes at present market value. Rollback taxes can be quite substantial (and punitive at times), so if it important to be knowledgeable if you are considering purchasing property or a change of use.

While tax codes are rarely simple or straightforward, when it comes to “ag exemptions” it definitely pays to do your research and Miniature Herefords may just be the answer you are looking for!

Mini Herefords: Good for Health

Ranching and Neuroscience: going hand in hand.

Well, I was going to write an in depth piece on the way manual labor enhances our well being and helps to insulate the brain from depression, backed up by some pretty interesting new research, but decided to keep this one on the relative light side.
We all have our miniature Herefords for a variety of reasons; the investment and return value is but a small factor. There certainly has to be more involved than the wallet to be really successful in any endeavor, be it cattle or baking cakes; there has to be the passion. And reward. Those who succeed do so because they believe in what they are doing is good for something or someone. They have a passion and can see real, tangible results from their efforts…these are the successful people we see in all walks of life, raising really good (anything)… miniature Herefords being just one example.
Working with ones hands gives immediate results and therefore gratification. These results, whether building a fence or helping a newborn calf to its feet, engage a part of the brain that is responsible for a sense of well being and gratification, taking our minds off the bigger issues in our lives that maybe mentally weighing us down. This may explain why so many folks with high powered – high stress occupations such as doctors, lawyers and others find farming and ranching as a way to relax and detox from their everyday lives. New research indicates for the first time that the simplicity and repetition (think sewing, ranching, gardening, etc!) of working with the hands, engaging the problem solving area of the brain, and seeing real, tangible results is the feel- good reward we all crave and, apparently need to protect against depression.
There is no place I would rather be than out working with my cattle. Building fence or hanging a gate, feeding and watching the animals eat, working with the vet. For many years I (and my family especially) thought there must be something seriously wrong with me. But now I finally understand the draw and desire that raising cattle has for me personally; immediate and tangible rewards from my mental and physical time invested. Is there anything more relaxing than leaning on a gate watching your animals as they move through a new pasture or kick up their heels in sheer delight for the life you have had a hand in providing?
For me, not much. Aside from watching my own children as they mature towards responsible adulthood, my cattle keep me sane. What more can I say. Crazy? If not for my small farm and my small herd of small cattle, I probably, quite seriously, would be.
So go ahead, take some time to enjoy the fruits of your labors. Go “kill some time” “puttering” (do we dare even do that these days?) around your place and with your animals. It may very well be the best therapy there is. .