Property Tax Credit Averages $2.38 per Acre
The Department of Revenue announced the 2020 property tax credit on agricultural property amounts to $109 million statewide, or $2.38 per taxable acre. Last year’s credit on agricultural property was $116 million, or $2.52 per acre. The credit on non-agricultural property this year equals $166 million, $7 million higher compared to last year. The total credit amount, $275 million, remains the same as last year.
The property tax credit (not to be confused with the income tax credit for property taxes paid to schools created with passage of LB 1107) applies to taxes levied on all real property. Credits are distributed based on the ratio of the valuation of each parcel of real property to the valuation of all real property in the state. Because of how the credits are distributed, the share of credits on agricultural property this year is less compared to last year. Valuation increases on agricultural property have stalled in recent years, while increases have accelerated for other property sectors. In 2019, the share of agricultural property eligible for the credit was 38 percent. This year, agriculture’s share is 35.5 percent. Thus, the decline in credit dollars on agricultural property.
Agricultural land in York County receives the highest credit per acre this year at $7.64, followed by Platte and Cuming Counties at $6.91 and $6.89 respectively (Figure 3). In contrast, the credit equals $0.49 per acre in Grant County and $0.51 in Sioux County. Custer County receives the largest amount of credit dollars on agricultural land at just over $2.98 million, followed by Holt and Platte counties. As a percentage of taxes paid on agricultural property, both real and personal, the 2020 credit on agricultural property averages 8.1 percent of the 2019 taxes levied (2020 taxes levied data is not available). Landowners in Keya Paha County see the greatest percentage tax reduction of 13.7 percent, while landowners in Boone, Fillmore, Dundy, Grant, Blaine, Wheeler, and Hooker counties, receive a credit equal to at least 11 percent of taxes levied.
Figure 3. 2020 Property Tax Credit on Agricultural Property
Source: NEFB calculations based on NE Dept. of Revenue data