How is Agricultural Property Valued?

In Wyoming, agricultural land is tax based on the land’s productive capability under normal conditions.

AG LAND DEFINITIONS

Common questions arise in the classification of agricultural lands.  Wyoming uses the following points as criteria:

1. As of the assessment date, the land is being used for an agricultural purpose, which include:
   • Cultivation of the soil for production of crops; or
   • Production of timber products or grasses for forage; or
   • Rearing, feeding, grazing or management of livestock
2. The land is not part of a platted subdivision;
3. If the land is not leased land, the owner has derived annual gross revenues of not less than five hundred dollars ($500) from the marketing of agricultural products.  If the land is leased, the lessee has derived annual gross revenue of not less than one thousand dollars ($1,000) from marketing of agricultural products.
4. The land has been used or employed, consistent with the land's size, location and capability to produce as defined by the Department's rules and the "Mapping and Agricultural Manual".

DETERMINING PRODUCTIVITY

There are three steps that must be satisfied to determine agricultural land productivity value:

1. Classification.  Identifying property ownership and classifying property types (i.e., urban, suburban, agricultural land, etc.) is the responsibility of the County Assessor's office.  The proper identification of property ownership is essential to the agricultural land evaluation process.  It determines the ownership boundaries and is the first step in determining land use.
2. Land Use.  There are three major categories of agricultural land.  They are irrigated crop, dry crop and rangeland.  Any or all three may be found in any given parcel of land.  To property value each agricultural parcel, these categories must be correctly identified and located.  This is accomplished through use of various materials, including aerial photography.
3. Productivity.  The following three categories of agricultural land are used in identifying productivity:

Irrigated Crop Land

Tons of all hay per acre is the productivity measurement used for valuing irrigated cropland.  This "measurement" is determined from environmental factors that affect the soils ability to produce.  These 'factors', or limitations, are published in the United States Department of Agriculture, Natural Resources Conservation Service's Soil Survey and include items such as precipitation, length of growing season, slope, etc.

Dry Crop Land

Bushels of all wheat, per acre, are the productivity measurement used for valuing dry cropland.  As with irrigated cropland, this “measurement” is determined by environmental factors that affect the soils ability to produce.  These ‘factors’, or limitations, are the same as to those used with irrigated cropland.

Range Land

Animal Unit Methods or “AUMs”, is the productivity measurement used for valuing rangeland.  The term “AUM” is defined as the amount of forage required to sustain a 1,000-pound cow, with or without a calf, for one month.

DETERMINING VALUE

Once ownership has been identified, land use has been established and the productive capability has been tabulated for the parcel, a four-step valuation process begins:

1. Determining Prices of Agricultural Products.  This information is derived from the Wyoming Agricultural Statistics Service's commodity price data.  This information, which consists of all hay, all wheat & grazing prices, is converted to a 5 year weighted average.
2. Capitalization Rate Selection.  This rate is based on the Farm Credit Services of Omaha's Long-Term Portfolio rates, which are also converted to a 5 year weighted average.
3. Determine Net Income.  To determine the net income, the unit price of each of the 3 commodities is multiplied times the production per acre.  Next, the landlord share is determined, if applicable, then the expenses and production losses are deducted to establish a net income to the landlord.
4. Capitalize Net Income.  The final step in the process is capitalizing the net income.  The following formula illustrates the valuation process:

Land Value

Per Acre

Capitalization

Rate

Per Acre X

Yield Net Value Per

Commodity Unit

FIGURING THE TAX BILL

Wyoming is a fractional assessment state.  This means that the taxable value is based on a portion of the full value.  In Wyoming this fractional amount is 9.5% for agricultural property.  To arrive at the assessed valued of the property, multiply the total land value per acre times 9.5%.  The assessed value is then multiplied by the appropriate tax district mil levy to obtain the tax.

To apply for the agricultural classification – The Affidavit for Agricultural Classification* must be filed.  This affidavit is available in our office and now available to the public online (click on the above link). 

*Note: In order to view the PDF documents you will need the Adobe Acrobat Reader 5.0 or higher installed on your computer. You can download a copy of Adobe Acrobat Reader from the link below:

 

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