It’s the certainty of taxes that has Jack Cavenah upset with the Parker County Appraisal District. Not that he has to pay them, but that others aren’t while laying claim to an agricultural tax exemption for what he calls “hobby” farms.
Cavenah, and a group of concerned citizens, approached the appraisal board at a meeting on Aug. 19. He said there were 425 properties in the county that claimed the agricultural exemption but did nothing with the land.
“What do you grow on less than an acre and make a living off of?” Cavenah asked? “My answer to that is nothing.”
He said that the county is losing roughly $19.2 million a year by allowing for the exemptions.
“I’ve driven by many of these places, even walked on them, and there is nothing,” he said. “It’s all open land.
“The law says land owners are supposed to produce a product and they aren’t – some aren’t even fenced.”
He said that even the Internal Revenue Service has a section in its tax code on the issue referring to them as “hobby” farms.
“I’m paying for someone else to have a ‘hobby’ farm,” Cavenah said. “I’m not against agricultural exemptions – for the real farmer, – but I don’t want to pay for somebody’s hobby if they don’t pay for mine.”
Cavenah said he had spent thousands of hours researching the subject and has come to the conclusion that anything under 20 acres shouldn’t receive such an exemption.
“I’ve made this my life mission, and I don’t have a whole lot of that left because I’m 76 years old, but this needs to be stopped and stopped now,” he added.
Jay Graham, another concerned citizen, echoed similar sentiments.
“There’s a disparity – a hit and miss method – that reflects on the administration of this office,” Graham said. “It needs to be corrected.”
Parker County Chief Tax Appraiser Larry Hammonds said it wasn’t as simple, citing that the law just doesn’t have the “teeth” it once did when it came to denying agricultural tax exemptions.
Hammonds said that in 1966, the Texas Legislature granted agricultural exemptions to folks using their land for agriculture but that 50 percent of their income had to come as a result of utilizing the land.
“You had to prove that 50 percent or more of your income actually came from your land, so that was pretty restrictive,” Hammonds said.
However, in 1978 the Constitution was amended “broadening” the language. The Legislature took out the clause regarding income or occupation making it easier to gain the exemption.
Hammonds said there were three rules to look at today:
• First, the primary use of the land has to be agricultural. It defines agricultural by giving a lot of examples of the type of agricultural that would quality.
• Second, the degree of intensity that’s typical to the area. “That means we look at what’s typical for other ranches in the area.”
• Third, It has to show a history of five out of the last seven years of some type of agricultural activity.
“There is nothing in the code that talks about making a nickel off of the land,” Hammonds said. “Nothing about income talked about whatsoever in the tax code.”
He said as for the size of the property, the tax code states that any policy that establishes arbitrary minimum size of acreage is ruled invalid.
“So there is not a minimum amount of acres in the tax code,” he added.
“We’ve tried to eliminate some of these exemptions but there’s not enough teeth in the law where they give good guidance on what qualifies and what doesn’t.”
According to Hammonds, Parker County is not alone. All total the county has 578,000 acres with 77 percent qualifying for a tax exemptions. He cited other examples of counties, and the percentage of agricultural exemptions its citizens qualify for such as: Denton County – 60 percent; Johnson County – 70 percent; Erath County – 92 percent and Wise County – 79 percent.
“It’s difficult to administer a law that has such broad-based qualifications,” Hammonds said. “We’re trying, but with 900 square miles, it’s just hard to clean up.”