Taxation of Tangible Personal Property Used in Agriculture

Excerpts from the Introduction: The differences in State tax structures extend beyond the choice of what taxes to use to differences in the taxes themselves. Thus, property is taxed in all 50 States but in no 2 States are the property tax laws identical. The result is that the tax treatment accorded to different kinds of property varies from State to State, and from one locality to another within many States. Although every State has made provision for the exemption of some property from the tax roll, there is considerable variation among the States, as well as among different local governments within any State, as to what is actually exempted. A few States have exempted personal property entirely, but the majority continue to tax some categories. Agriculture requires large amounts of such property as land and machinery. In recent years, the trend has been toward ever-increasing investment per farm, with the result that farms are becoming more vulnerable to property taxes. While there have been numerous studies concerning the taxation of farm real estate, little information is available concerning the taxation of farm personal property. It is the object of this report to describe how the various States tax tangible personal property used in agriculture. Consideration is also given to the contribution made by these levies for the support of State and local governments.