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Level 2

AL Ag Facts:

Land Taxes

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The first map in this series shows the average agricultural real estate taxes per acre, by state. Alabama agricultural land taxes are only about one fourth or one fifth the national average, and much below nearly all other states by rank (see New Mexico).

The second map shows the average agricultural real estate taxes per $100 of valuation, by state. The same conclusions follow for Alabama as when taxes are figured by acre.

The third map shows the percent change for agricultural real estate taxes per acre in the period 1994-1995, by state. Alabama taxes increased, but not by much and not as much as the national average.

Prof. Susan Hamill of the University of Alabama Law School recently completed a thesis on fairness in Alabama land taxes from a religious point of view (for a degree outside of law). Her thesis is being printed by the Alabama Law Review. Among other points, she shows that Alabama forest lands cover about 70% of the area of Alabama yet pay only about 2% of land taxes; for a different look at the same topic, see the Alabama Forestry Association (www.alaforestry.org) or the section on Forestry below. Her thesis can be found through her academic web page, or through the second button at right.

Perhaps in trying to understand Alabama land taxes we need to consider:

-The extent to which low productivity in Alabama justifies low taxes.

-The extent to which low taxes perpetuate low productivity: directly through allowing land to remain under-used, and indirectly by undermining education funds and other needed public activities (see page on Rural Poverty and Development under AL Ag Facts from drop-down menu above).

-The extent to which higher taxes might stimulate greater efficiency in traditional agricultural productivities and might stimulate the continued development of new agricultural productivities.

-The extent to which the growth of new agricultural productivities, often on small tracts of land, justifies (or does not justify) higher taxes on agricultural land in general.

-The extent to which land taxes should reflect land market values, even if those market values are not determined primarily by the utility of land for agricultural enterprise.

-The extent to which land taxes should reflect land market values if those market values are strongly influenced by speculation.

-The effect on agriculture if land taxes more closely reflected land values at rates in line with national averages, that is, not at unusually high rates.

-The effect of land taxes on marginal farmers and on poor rural people.

-The effect of land taxes on new rural residents who are not poor.