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Farm tax exemption needs reform

It’s surprising that there are mixed feelings among farmers about the farm property tax exemption. One might assume that farmers would support the exemption whether or not they qualified under new regulations or not.

Instead, while some farmers and organizations representing agricultural interests support the exemption, others do not.

To be eligible, farmers must show – in at least one of the past three years – 50 percent or more of income from production farming and no more than $40,000 earned in other income. A landlord who rents a house to an active farmer who can show eligibility under the law also can claim the exemption.

Farm Bureau board member John Pietsch, who lives south of Minot, said the $40,000 cutoff for off-farm income may no longer be realistic as wages have risen and can easily penalize a family when a spouse takes an off-farm job to secure health insurance. “The majority of their income is still coming from the farm,” he said. “With the amount of money it takes to keep the farm operating, that $40,000 is probably a little bit on the low side.”

Pietsch is among many who feel the exemption is unfair in picking winners and losers.

Some point out that the tax hits farmers who are making ends meet by working off the farm and barely exceeding the $40,000 limit, while other farmers who’ve seen more success pay no tax on high-end homes. Either farmers should get the tax break or not, says Farm Bureau member Linda Anderson.

“Do it one way or another. Picking and choosing doesn’t seem fair,” Anderson said.

Even Rep. Marvin Nelson, D-Rolla, asserts the current system picks winners and losers, but also points out that no one has yet come up with a better strategy.

It’s time for a better strategy to be developed. Between the legislature and agriculture industry groups, a better system needs to be identified, communicated to farmers, and instituted.

This is one reform that is needed and on which common ground should be possible to find.

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