Ag Taxes as a Share of Receipts
A few years ago, a farmer testifying at the Legislature on a property tax bill commented that property taxes aren’t paid with dirt. His point being it takes revenue generated from the land to pay property taxes and ownership of land doesn’t, in and of itself, demonstrate an ability to pay taxes.
Whether intentional or not, the farmer described a way of measuring the burden of taxes on agriculture land—property taxes as a share of revenue or receipts. It’s a crude measure, because not all agricultural receipts are tied directly to the land, but by comparing shares over time one can get a sense of changes in the burden of property taxes for farmers and ranchers.
In 1993, taxes levied on agricultural land equaled $311 million. Total agricultural receipts in Nebraska that same year were $8.8 billion. Taxes as a share of receipts equaled 3.5 percent. By 2019, property taxes had grown to $1.2 billion, 3.8 times the amount levied in 1993. Receipts in 2019 equaled $21.6 billion, 2.4 times the receipts in 1993. Taxes in 2019 equaled 5.5 percent of receipts. In effect, taxes levied between 1993-2019 grew at a faster rate compared agricultural receipts. The result, taxes levied today take up a greater share of receipts compared to 1993.
Producers have no control over property taxes levied like they do other costs. Thus, with the rising share of receipts taken by taxes, producers must seek to generate more receipts to just to keep the tax share stable. Given the inevitable rise in property taxes, the need for more revenue to pay the taxes is inevitable too.
