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The Livestock Loophole

livestockBelieve it or not, one of the many ways the wealthy “1 percent” game the tax code involves cows and donkeys.

There is a “use-value assessment” of rural land in the tax code that can give a huge loophole to landowners.  For example:

Florida Senator Bill Nelson saved tens of thousands yearly in property taxes by allowing a few cows to graze on his land. He has made millions selling parcels of this land, but pays minimal taxes because of the farm tax credits he is claiming.

Tom Cruise only paid $400 per year in property tax on land worth $18 million, because he had a few sheep grazing there.

When actress Goldie Hawn heard about this trick, she had her 34 acres of land reclassified as farmland, which reduced her tax bill to less than $3,000. She then received almost $38,000 back from her county as a refund for her previous tax “overpayments.”

The use value policy is meant to prevent farmers from having to sell their land because of growing property taxes. The barrier for qualifying, however, is ridiculously low, as you can see.

 

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