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Legislature > House of Representatives > House Research > Taxes > Major State Aids & Taxes

Major State Aids & Taxes: Market Value Agricultural Credit

Program Description

The 2001 Legislature created a new market value agricultural credit for all agricultural homestead property. The credit took effect for taxes payable in 2002 and was enhanced by the 2002 Legislature for taxes payable in 2003 and thereafter.

For agricultural homestead property with a taxable market value of $115,000 or less, the credit is equal to 0.3 percent of the taxable market value of the property. For agricultural homestead property with a value between $115,000 and $345,000, the credit is equal to $345 minus 0.05 percent of the value over $115,000. For property with a value over $345,000, the credit is equal to $230. This credit does not apply to the value of the house, garage, and one acre of agricultural homestead property.

Payable 2014 Aid Amount and Reporting: $39.7 million

For taxes payable 2003 to 2006 and 2008 to 2011, the state did not fully compensate local governments for the credit computed on each taxpayer's tax statement due to state budget shortfalls. The taxpayers still received the credit. Throughout these web pages, the credit amounts shown are after the reductions in compensation resulting from state budget shortfalls.

For taxes payable in 2007 and 2012 to 2014, the state paid the full amount of the credit to local governments. In payable 2014, the amount of the credit was $39.7 million.

Market Value Agricultural Credit: Payable 2014
Amount
(thousands)
Percent of
Total
Northern Regions Northwest (1)
Headwaters (2)
Arrowhead (3)
West Central (4)
Five (5)
East Central (7E)
$2,677
1,414
1,432
4,275
3,393
3,106
6.7%
3.6
3.6
10.8
8.5
7.8
Southern Regions Six East (6E)
Upper MN Valley (6W)
Central MN (7W)
Southwest (8)
Nine (9)
Southeastern MN (10)
2,267
1,627
3,608
3,564
3,965
6,312
5.7
4.1
9.1
9.0
10.0
15.9
Total Nonmetro $37,640 94.7%
Metro Region Hennepin County
Ramsey County
Remaining Metro
277
2
1,830
0.7
0.0
4.6
Total Metro $2,109 5.3%
State Total $39,749 100.0%

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Recent Law Changes

The 2014 Legislature increased the market value agricultural credit beginning with taxes payable in 2014. Because property tax statements for 2014 had already been issued, the increased credit amounts for 2014 were authorized as supplemental credit payments sent directly to taxpayers by the Department of Revenue.

The supplemental payment was $205 for each agricultural homestead, provided that the supplemental payment could not exceed the net tax payable on the agricultural portion of the property

A portion, $22.7 million, of the 2014 credit amount was based on the original credit amounts that were deducted on property tax statements. The total of the supplemental credits issued directly to taxpayers by the Department of Revenue was $17.1 million.

Beginning with aids payable in 2015, the market value agricultural credit will be 0.3 percent of the first $115,000 of market value, plus 0.1 percent of the market value over $115,000, subject to a maximum credit of $490 per agricultural homestead.

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December 2017

House Research Department  ♦  600 State Office Building, Saint Paul, MN  55155  ♦  House.Research@house.mn  ♦  651-296-6753