Agriculture is one of Ohio’s most important industries, employing one out of every seven Ohioans in a related job. Not only that, but the industry contributes billions of dollars to our economy and helps keep our families fed. A crucial aspect of keeping the agriculture sector successful is to support our farmers and ensure they are able to afford and maintain their land.


That’s why the state made it a priority during the recently passed budget bill process to modernize the Current Agricultural Use Value (CAUV) tax. This reform will offer property tax relief for farmers by reducing the taxable value of farmland.


The CAUV was originally introduced in the 1970s, with the goal of reducing property taxes to help farmers afford their land so they did not feel pressure to sell to commercial developers. However, as the valuations factored into the formula have fluctuated over the years, many farmers have seen their tax rate more than double. This calculation of the CAUV does not accurately reflect today’s farm economy, and our farmers are taking on the costs.


The CAUV appraisal takes into consideration a number a factors, including soil productivity, crop yield, capitalization rate, non-land production and more. It will now be calculated using a capitalization rate according to numbers published by the United States Department of Agriculture (USDA) on the average rate of return for farm equity over 25 years. This means that the calculation of a farm’s property tax will be based on more consistent numbers and will be less susceptible to drastic changes.


With this change, our farmers will have a better sense of what their property taxes will look like into the future and should experience lower property taxes as these reforms are phased in over the next several years. Agriculture is the foundation of our state and is vital to southeastern Ohio.
Furthermore, oil and gas development in southeastern Ohio has had the secondary effect of making family farms more viable, and a modernized, more reliable CAUV will help our family farmers to ensure that our food and livestock operations continue to be productive and profitable.

 
 
 
  
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