Franklin County TX Ag Exemption
Your Guide to Agricultural Tax Relief
This Article is Part of Our Guide on the Ag Exemption in Texas
In Franklin County, Texas, agricultural landowners can benefit from property tax exemptions that are designed to support farming and timber activities. These exemptions are fundamental to landowners, easing their financial responsibilities and encouraging the sustainability of agriculture and timber within the county. To leverage these benefits, landowners must adhere to specific guidelines and requirements administered by local and state tax authorities. The property tax code, particularly Section 11.1825, provides a framework for these exemptions, which also extends to initiatives like constructing or rehabilitating low-income housing.
Applying for an agricultural exemption in Franklin County involves a clear process. Prospective applicants must first obtain an agricultural and timber registration number (Ag/Timber Number) through the Texas Comptroller of Public Accounts. This number is essential as it must be included on the exemption certificates when purchasing qualifying items. The process is designed to ensure that only those who legitimately qualify can claim exempt status, thereby maintaining the integrity of the system and ensuring it serves those who are engaged in earnest agricultural and timber efforts.
Franklin County Appraisal District plays a pivotal role in managing these exemptions locally. They issue public notices detailing the capitalization rates used to appraise property which benefits from these exemptions. Additionally, the district's Ag Advisory Board, which includes members from various agricultural sectors, provides oversight and advice to ensure fair and accurate appraisals of agricultural land. This diligent governance helps maintain the balance between supporting agricultural enterprises and ensuring necessary revenue for local services and infrastructure.
Eligibility and Qualifications for Ag Exemption
In Franklin County, TX, securing an agricultural exemption requires meeting specific criteria, including land use, ownership, and operational standards. These exemptions can significantly reduce property tax obligations by valuing the land based on agricultural use rather than market price.
Understanding Agricultural Land Use Criteria
To qualify for an agricultural exemption in Franklin County, the land must be primarily used for bona fide agricultural purposes. This use includes, but is not limited to, cultivating the soil, producing crops for human food, animal feed, or planting seed crops, raising or keeping livestock, or managing wildlife resources.
Qualifications for Agricultural Use:
The land must be used to raise crops, livestock, or other agricultural products.
A history of agricultural use is typically necessary to establish the land's eligibility.
Clarifying Ownership and Use Requirements
For a property to be eligible for an agricultural exemption, it must be owned by an individual or entity engaging in agriculture as a business activity. The ownership must be established and maintained:
Ownership and Use:
The property must be owned by the claimant.
The agricultural operations on the land must be managed by the owner or lessee and reflect a degree of intensity typically associated with such agricultural practices in Franklin County.
Minimum Acreage and Intensity Standards
Franklin County stipulates minimum acreage and degree of intensity standards to qualify for an agricultural exemption. These standards ensure the land's use aligns with typical agricultural productivity levels within the region.
Minimum Acreage:
There's a minimum acreage requirement tied to the property's classification of agricultural land.
The required acreage varies depending on the type and intensity of agricultural activity.
Degree of Intensity:
The land must meet the specific degree of intensity standard—measured in animal units or crop yield per acre—that is customary for the region.
Practices must be sustained consistently for at least five years if establishing a new agricultural operation.
Application Process for Agricultural Exemption
Franklin County, Texas, offers agricultural exemptions to qualifying property owners, providing substantial savings on property taxes. This process involves obtaining specific forms, securing a registration number, and adhering to documentation guidelines.
Obtaining the Necessary Forms
To initiate the application process for an agricultural exemption in Franklin County, applicants must acquire the necessary forms from the Texas Comptroller of Public Accounts. The key forms include Form 01-924, the Texas Agricultural Sales and Use Tax Exemption Certification, and Form 01-925, for Timber Operations Sales and Use Tax Exemption. Additionally, Form 14-305, the Application for Texas Agricultural and Timber Exemption Registration Number, is essential for obtaining an Ag/Timber Number.
Registration Number and Identification
The Ag/Timber Number functions as a unique identifier for individuals seeking an agricultural exemption. Applicants must apply for this registration number using Form 14-305. This number, once obtained, must be included on exemption certificates when purchasing qualifying items. The Chief Appraiser of the Franklin County Appraisal District oversees the review and validation of these numbers.
Documentation and Submission Guidelines
Property owners are required to submit a valid application with the Chief Appraiser of the Franklin County Appraisal District, which includes all pertinent documentation demonstrating eligibility for the agricultural exemption. For the application to be considered timely, submission must follow the guidelines set forth by the district, which can include proof of agricultural use, degree of intensity, and ownership details. The Chief Appraiser may also request additional information or documentation to substantiate the claim for an exemption.
Proper adherence to the application process for the agricultural exemption is critical for property owners seeking property tax assistance. It ensures compliance and timely approval of the exemption status.
Property Valuation and Tax Implications
In Franklin County, TX, agricultural exemptions have a significant impact on property taxation, establishing a system that favors productivity value over market value. These exemptions and valuations are vital for landowners to understand to maximize tax savings and to grasp the tax implications of land use changes.
Assessing the Agricultural Value
The chief appraiser evaluates farmland based on its agricultural value rather than its market value. This agricultural value, also known as productivity value, considers the land's ability to produce agricultural products. The valuation process is regulated to ensure that it adheres strictly to the guidelines provided by Texas's property tax code.
Understanding the Rollback Tax
Rollback taxes apply when a property's use changes from agricultural to another use. These taxes are calculated as the difference between the taxes paid on the agricultural value and what would have been paid based on the market value for each year under review, up to five years. A 7 percent interest rate is added to the owed amount for each of these years.
Tax Savings and Financial Impacts
Landowners with agricultural exemptions enjoy significant tax savings because taxes are levied based on the typically lower agricultural value. It's vital for property owners to maintain their land's qualifications for agricultural use to continue benefiting from these financial advantages.
Special Valuations and Capitalization Rate
For properties qualifying under special valuations, the capitalization rate is a key factor. This rate, mandated by the Texas Property Tax Code, is applied to the property's net income from agricultural operations to calculate the property's taxable value. This mechanism ensures that taxes remain tied to the land's agricultural productivity and success, reflecting the intent of agricultural valuation benefits.
Agricultural Operations and Permissible Activities
In Franklin County, TX, obtaining an agricultural exemption requires adherence to specific guidelines and activities related to various agricultural operations. This exemption impacts property taxes, ensuring that qualifying lands are appraised based on their capacity to produce agricultural products.
Crop and Livestock Requirements
The core of Franklin County's agricultural exemption hinges on the use of land for producing crops and livestock. To qualify:
Crops: Land must be actively used for growing agricultural products such as grains, fruits, vegetables, and forage for animal feed.
Livestock: Raising livestock, which includes cattle, poultry, or fish, is essential for an agricultural appraisal.
It is important for owners to demonstrate that the land's primary use is for agricultural production and not recreational or residential.
Wildlife Management and Conservation
Wildlife management activities can qualify as an agricultural operation if they meet the county's guidelines on land use. These practices may include:
Habitat control
Erosion control
Predator management
Providing supplemental supplies of water
Providing supplemental supplies of food
Making census counts to determine population
Conservation efforts must be directed towards sustaining a breeding, migrating, or wintering population of indigenous wild animals.
Alternate Agricultural Endeavors
Franklin County recognizes various other agricultural endeavors:
Fiber: Production of fiber, like cotton, is a qualifying activity.
Beekeeping: For beekeeping activities, there is typically a minimum acreage requirement.
These alternate agricultural endeavors must be conducted with the intent to produce a product for sale and contribute to the sustainability of the agricultural operation.
Timber Exemption and Production
For land focused on timber production, an exemption may apply when the property is used to grow trees for commercial timber sales. The requirements for an exemption include:
Management practices aimed at the harvesting of timber.
Land that has established trees suitable for the commercial production of timber.
Timber exemption is distinct from typical agricultural exemptions but shares the common goal of appraising land based on its productivity, not its market value.
County Appraisal District and Chief Appraiser
The Franklin County Appraisal District holds the responsibility of appraising property within its jurisdiction for tax purposes, and the Chief Appraiser oversees these operations to ensure accurate valuations, including those with agricultural exemptions.
Roles and Responsibilities
The appraisal district plays a crucial role in assessing the value of properties in Franklin County, including determining eligibility and valuing property for agricultural appraisal. The Chief Appraiser, a pivotal figure in the district, leads this process. Responsibilities that fall under the district and Chief Appraiser include:
Application of agricultural appraisal methods.
Administration of rollback taxes, levied when land in agricultural use is changed to another use.
Compliance with the Texas Property Tax Code and USPAP.
Appealing Valuation Decisions
Taxpayers in Franklin County who disagree with the valuation or agricultural appraisal of their property by the county appraisal district can appeal to the Appraisal Review Board (ARB). The process involves:
Filing a written protest with the ARB.
Attending a hearing to present evidence and arguments.
The ARB ruling, which can be further challenged in district court if necessary.
Contact Information and Support
For support, questions, or detailed information on property appraisals, taxpayers can reach out to the Franklin County Appraisal District through the following ways:
Chief Appraiser: Russell McCurdy
Email: [email protected]
Address: PO Box 720 Mount Vernon, TX 75457-0720; 310 W. Main Street Mount Vernon, TX 75457
Office Hours:
Monday - Thursday 8:00am - 5:00pm
Friday 8:00am - 4:30pm
Closed Daily from 12:00 - 1:00 for lunch
For frequently asked questions, taxpayers may visit the Franklin County Appraisal District's website or contact their office directly.
Special Cases and Exotic Animal Guidelines
For landowners in Franklin County, TX seeking agricultural exemptions, it's important to be aware of the specific requirements for unconventional agricultural practices such as those involving exotic animals and beekeeping. These special cases have particular guidelines that need to be followed to qualify for exemptions.
Guidelines for Exotic Animals and Beekeeping
Exotic Animals:
Criteria for exemption: Land used for raising exotic animals must be for the purpose of producing human food, fiber, or other items of commercial value.
Species: This can include a variety of exotic birds and animals not traditionally found on Texas farms.
Beekeeping:
Number of hives: A minimum number of beehives are required, which is subject to local appraisal district guidelines.
Purpose: The beekeeping activities must aim for the production of honey or pollination services for agriculture.
Fish, Poultry, and Other Specialty Cases
Fish:
Qualified Aquaculture: Farms engaging in the raising of fish in controlled environments for commercial purposes can claim an exemption. This may include fish ponds or tanks used for breeding.
Poultry:
Scale of operation: Poultry operations need to demonstrate commercial viability for exemption, typically assessed based on inventory, sales, and scale.
For these unique agricultural ventures, maintaining the appropriate records and meeting the set requirements are vital steps for Franklin County, TX, landowners to benefit from the agricultural exemption. Compliance with local regulations is essential, and it's advised to consult with the Franklin County Appraisal District for detailed processes and qualifications specific to these special cases.
Education, Training, and Organizational Support
Franklin County is committed to providing a robust framework for education and training in agriculture. Resources are strategically aligned to support local farmers, future agricultural professionals, and youth with interests or careers in farming and ranching.
Local Educational Opportunities
Franklin County provides a variety of agricultural vocational courses aimed at enhancing the skills of local farmers. These courses often cover a range of topics, from crop management to livestock care, ensuring that farmers are well-equipped with the necessary knowledge to succeed. Educational opportunities are regularly updated to reflect the latest agricultural practices and are tailored to meet the specific needs of Franklin County's agricultural community.
Local Institutions Offering Agricultural Courses:
Franklin County Community College
County Agricultural Extension Office
State-Wide Training and Workshops
The Texas State Comptroller’s office offers training and workshops covering a breadth of topics. These workshops include financial management, tax benefits, legal aspects of farming, and more. The comprehensive nature of these workshops ensures that farmers across the state, including those in Franklin County, are well-informed on agricultural practices and state regulations.
Workshop Topics:
Tax Benefits for Farmers
Sustainable Farming Practices
Crop and Soil Management
Youth and Future Farmer Programs
Franklin County actively supports youth agricultural education through organizations such as Future Farmers of America (FFA) and 4-H. These programs provide hands-on experiences and leadership training to develop the future generation of farmers.
Youth Organizations in Agriculture:
4-H: Focuses on empowering youth to reach their full potential through various developmental programs.
FFA: Provides students with opportunities to apply practical classroom knowledge to real-world agricultural scenarios.
In these programs, students engage in comprehensive agricultural education, from learning the business aspects of farming to participating in agricultural science fairs. These programs are vital in fostering a strong future for the agricultural sector in Franklin County.
Legal and Regulatory Framework
The framework for agricultural exemptions in Franklin County, Texas is rooted in a complex interplay of state constitutional provisions, property tax laws, and local regulations designed to support agricultural and conservation efforts.
Texas Constitution and Property Tax Law
The Texas Constitution provides a legal basis for property tax exemptions through specific agricultural valuation, allowing land used primarily for agricultural purposes to be taxed based on productivity value rather than market value. This special valuation aligns with Article VIII, Section 1-d and 1-d-1 of the Texas Constitution, which enables landowners engaged in agricultural activities to benefit from reduced property taxes, promoting the state's agricultural industry.
Reviewing the 1-d and 1-d-1 Ag Exemptions
There are two main types of agricultural exemptions in Texas: 1-d and 1-d-1. The 1-d agricultural exemption pertains to properties that have been continually used for agricultural purposes by the same owner for at least five years. The 1-d-1 exemption, conversely, is geared towards land that meets certain intensity standards of agricultural use without the same duration of ownership. Both exemptions require adherence to specific intensity standards to ensure that the land uses are legitimately agricultural.
Compliance with State and Local Regulations
In order to maintain an ag exemption, landowners in Franklin County must comply with state and local regulations, which include obtaining an Ag/Timber number and submitting the appropriate sales and use tax exemption certification. Texas Appraisal Districts play a crucial role in assessing compliance, which encompasses verifying that the land meets productivity value assessment and the agricultural land is used in a manner consistent with the criteria set by law for conservation and agricultural stability.
Annual Requirements and Ongoing Compliance
In Franklin County, TX, adhering to annual requirements and ensuring ongoing compliance are pivotal for maintaining agricultural exemption benefits. The process demands active agricultural use and diligent reporting and record-keeping.
Maintaining Eligibility Through Active Use
The core of ongoing compliance for an agricultural exemption in Franklin County hinges on the active use of the land for agricultural purposes. Landowners must continually demonstrate that their land is primarily used for agriculture, whether it be for cultivation, livestock raising, or other qualifying agricultural activities.
Conservation Practices: Implementing and maintaining soil and water conservation measures can be part of demonstrating active agricultural use.
Timber Operations: For those involved in timber operations, active use includes cultivating forests for the production and harvest of timber.
Annual Reporting and Record-Keeping
Annual reporting and meticulous record-keeping are essential to prove the land's use aligns with the exemption requirements.
Landowners are responsible for submitting annual reports detailing their agricultural productivity to the county appraisal district.
Proper records must include documentation of agricultural activities conducted throughout the year, such as receipts and logs related to conservation efforts, crop sales, livestock purchases, and other relevant transactions.
These records serve not only as proof of ongoing agricultural use but also help in accurately assessing the land’s value for the exemption status. Failure to comply with these requirements can result in the loss of agricultural exemption benefits.
Additional Considerations and Resources
When navigating the agricultural exemption process in Franklin County, Texas, applicants should know the importance of accurate form submission, seek advisement for best practices, and understand how local advisory boards impact valuation. These elements are essential to a successful application for an agricultural exemption.
Supplemental Forms and Online Services
For those in Franklin County seeking an agricultural tax exemption, various forms, such as the Application for 1-d-1 (Open-Space) Agricultural Use Appraisal (AP-197), must be completed. It is crucial to access these documents through the Texas Comptroller of Public Accounts website to ensure they are the most current versions. Moreover, applicants might find it necessary to utilize Adobe Acrobat Reader to view and fill out these forms. WebFile, an online service portal provided by the comptroller, offers a streamlined solution for electronically managing tax responsibilities, including the filing of franchise tax reports.
Recommendations for New Applicants
New applicants should diligently review the criteria for agricultural exemptions to understand which activities qualify and which are considered non-agricultural use. They are advised to consult with local experts, like Russell McCurdy, the Chief Appraiser at Franklin County Appraisal District, to gain insights specific to the local area. This kind of personalized guidance ensures adherence to regulations and enhances the likelihood of approval.
Accessing Local Area Information
Understanding the dynamics of the local area and its agricultural profile can be critical. The Franklin County Appraisal District's Ag Advisory Board, considering geographic variances and operation sizes, provides valuable insights into local industry standards. Regular meetings of this board are called by the chief appraiser and minutes or summaries from these meetings can be a resource for staying informed on relevant agricultural operations within Franklin County.
