We want to provide more information about the March 21 story (“Officials push against farm tax relief bill”) to make a key point that any annual increase or decrease in use value for taxation is limited to 4 percent. Values, therefore, for taxation will not immediately decline 16 to 20 percent, as stated in the article.
Value for taxation continues to be based on a moving average of net income calculated by Mississippi State University and capitalized. If income goes up as crop prices improve, use value goes up as will land taxes. Also, should millage go up, farms share in that change also, in addition to the 4 percent limit in change of value, further mitigating the effect on other classes of property from the change in use value from lower income, or the new 12 percent capitalization rate. The proposed legislation adds more flexibility statewide with farm taxes fluctuating as income varies and restores the 10-year moving average implemented in 1991. Changes are gradually phased in starting in 2021, and landowners are not exempt from a millage increase.
The Board of Supervisors approves the school budget and that part of total millage allocated to schools, and how funds are used to meet requirements to operate the county.
Another part of the bill keeps agricultural land used for hunting and fishing land from being classified as commercial property and keeps parts of farms from being carved up and reclassed because acreage is not growing a harvested crop. The bill does allow hunting and fishing lease income to be part of the valuation and had been previously excluded.