Property Tax Credit Averages $2.49 per Acre
The Department of Revenue reports the 2021 property tax credit on agricultural property is $114 million statewide, or $2.49 per acre, higher compared to last year’s credit of $109 million or $2.38 per acre. The credit on non-agricultural property is $186 million, $20 million more than last year. The total 2021 credit amount, $300 million, is greater because this year’s budget passed by the Legislature increased funding for the program.
The property tax credit (not to be confused with the income tax credit for property taxes paid to schools claimed when income taxes are filed) applies to taxes levied on all real property. Credits are distributed based on the ratio of a parcel’s value to the valuation of all real property in the state. Because of how the credits are distributed, the share of credits applied to agricultural property this year is less compared to last year. Valuation increases on agricultural property trailed the increases seen for other property sectors. Thus, the credits applied to agricultural property account for 38 percent of the credits distributed while they equaled 40 percent in 2020.
Agricultural land in York County will receive the highest credit per acre at $7.65, followed by Platte and Cuming Counties at $7.24 and $7.15 respectively (Figure 1). In contrast, the credit equals $0.54 per acre in Sioux County, $0.55 per acre in Grant County, and $0.58 in Kimball County. Agricultural taxpayers in Custer County receive the largest amount of credit dollars at $3.04 million, followed by taxpayers in Platte and Holt Counties.
Figure 2 also shows the per acre property taxes levied in 2020 on agricultural property in each county for comparison. Taxes levied include taxes on machinery or equipment, farm residences, farm buildings, and agricultural land. Per acre taxes paid by landowners in Douglas and Sarpy Counties ($139/acre) are much higher than those paid in other counties. Levies in these two counties are much higher than those levied in other counties. In contrast, landowners in Grant, Hooker, and Sioux Counties paid property taxes of $4.00-$5.00 per acre.
Figure 1. Per Acre Tax Credit (2021) & Taxes Levied (2020)