State Action Relating to Taxation of Farmland on the Rural-Urban Fringe

Excerpts from the report: This report summarizes legislation enacted or considered by various State legislatures in an effort to cope with the problems of taxing agricultural lands lying in the path of urban expansion. Pertinent sections of State laws and bills that deal with criteria for assessing such farmland are quoted in full or in part. Several States have sought to handle the problem without enabling legislation through special instructions to local tax assessors. Samples of these instructions in tax assessor manuals are contained in the appendix. No attempt is made, however, to evaluate either the desirability or the effectiveness of these various measures. This report considers three major approaches adopted by various States: (1) preferential assessment, which attempts to value the property for tax purposes on the basis of current rather than potential use, (2) purchase of development rights which attempts to control directly the growth in an area, and (3) plans for deferring taxes due on land until it is sold out of its present use.