BOISE, Idaho — A bill intended to localize and standardize how agricultural land is assessed and create what proponents say is a fairer taxation system for farmers has been introduced in the Idaho Legislature.
Rep. Megan Blanksma, R-Hammett, introduced House Bill 495 in the Revenue and Tax Committee on Feb. 12.
“You might think how land gets valued is a small deal, but it’s not,” said Doug Barrie, a farmer who grows grain and alfalfa near Idaho Falls, and is president of the Bonneville County Farm Bureau. “It’s been a battle lately.”
When Barrie’s land was assessed in 2018, he said the assessed value escalated by 300%, meaning he had to pay higher taxes.
“Our margins in the ag community have been so tight,” said Barrie. “These tax assessments just make them tighter. I’m really happy Representative Blanksma is taking this up. It could make a real difference for farmers.”
The bill, if passed, would create two main changes.
First, according to Sean Ellis, spokesperson for the Idaho Farm Bureau Federation, the bill would erase the false perception that agricultural land somehow receives an exemption from paying property taxes. The current system, said Ellis, creates confusion and loopholes with “speculative” versus “actual use” values. This bill would simplify the language, creating one standardized system for valuing agricultural land.
The second change the bill would make is ensure that county assessors have the freedom to use local data rather than state or national data to calculate land values.
“Generally, having localized data is a good thing and it’s more accurate,” said Robert Morrison, an independent agricultural land appraiser in eastern Idaho.
Assessed value and market value are two different things, said Morrison. This bill deals with assessed value — the value of agricultural land determined for tax purposes and based on factors such as income and crop prices.
Appraisers like Morrison, on the other hand, determine market value for buying and selling land and using it as collateral for loans.
Idaho’s agriculture is far from uniform, and proponents of the bill say assessment data should be localized because farming prices, practices and crops vary throughout the state.
In Canyon County, for example, fruit grows well. But plant a fruit orchard in the southern Idaho desert, Ellis said, and you won’t have the same luck.
Or consider the differences in water accessibility across the state. While some parts of western Idaho are flowing — even flooding — with water, he said, other areas are dry and carry heavier water expenses.
The purpose of H495, said Ellis, is so farmers are taxed based on their actual crops and costs, averaged to account for crop rotation.
The problem of unfair taxation, said Blanksma, lies not with local assessors but with the Idaho State Tax Commission.
“The local assessors are trying to do the best job they can using local information,” said Blanksma. “Then the state tax commission swoops in and bullies them into raising the taxable land values. This bill puts the power back into the hands of the local assessors who know the farmland better than the state does.”
Blanksma had the idea to introduce this bill because, before she joined the Idaho Legislature, her family farm faced what she considered unfair treatment from the Idaho State Tax Commission.
The county assessor, she said, gave her family what they considered a reasonable assessment based on local data. Then the tax commission stepped in and mandated that state and national data be used instead. Blanksma said this resulted in “artificially inflated” land values, meaning the farm had to pay higher taxes than it should have.
Blanksma said, for example, the tax commission claimed that her family could grow fruit trees on their land.
“We live in south-central Idaho, and we can’t grow fruit,” said Blanksma. “We do beans and potatoes. We have to pump in water from the Snake River, and it costs a power bill and a half. They were trying to tax us like we were from a totally different part of the state.”
In response, Blanksma gathered her neighbors together to stand against the tax commission. They pooled their spreadsheets, crop information and other data and presented it to the commission, showing that national and state data don’t reflect their situations.
This happened not once, Blanksma said, but year after year. Sometimes the commission relented to community pressure; sometimes it didn’t.
Blanksma said she suspects the Idaho State Tax Commission aims to wring more tax revenue out of agricultural communities, even though residential areas use more tax-funded services like ambulances and libraries.
According to a recent study by Brigham Young University-Idaho, residential areas receive more money in services than they generate, while agricultural lands generate more tax dollars than they receive in public services.
Blanksma said she has a broader concern about artificially raised taxes: that it will exacerbate an already difficult situation in which farmers across Idaho are losing land that had been in the family for generations because it’s no longer affordable.
“If we continue on the road we’re on,” she said, “it could tax people right out of their farms.”
Barrie, the grain and wheat farmer, also said the tax commission’s current policies are hurting the broader agricultural economy.
“The tax commission has been pickin’ on ag and using values that aren’t true to our local economies,” he said. “I don’t have an anti-tax message. It’s just bureaucracy. I’m fine with paying my taxes so long as they’re fair.”
A spokesperson for the Idaho State Tax Commission declined to comment, saying that the tax commission does not comment on “pending legislation or policy issues.”
However, Kathlynn Ireland, property tax policy specialist for the commission, said that "the most relevant and useful information for assessing ag properties in Idaho is local farmer income and expense data."
The bill passed unanimously out of committee and is on its way to the House floor.