CAUV formula to be improved

For Immediate Release

March 6, 2015

COLUMBUS, Ohio (OFBF) – Increases in farmland valuations will be reduced following the Ohio Department of Taxation’s decision to enact administrative changes to the Current Agricultural Use Value (CAUV) formula recently proposed by the Ohio Farm Bureau Federation (OFBF).

Farm Bureau initiated an extensive review of the program as tax bills for many farmers recently doubled or even tripled at a time when farm income has fallen dramatically.

The formula will now more closely tie tax values to current economic conditions in agriculture and will also more accurately value woodlands. This will lower valuations in counties being reassessed in 2015, for taxes payable beginning in 2016.

As an example, Farm Bureau projects cropland valuations will be 26 percent lower and woodland valuations will be 54 percent lower than previously projected for Ohio’s most prominent soil type (Miami silt loam). Part of the CAUV formula is based on soil type, which reflects the land’s productive capacity. There are more than 3,500 soil types in Ohio.

These projected reductions apply only to the valuation and not to the overall tax amount, which is also affected by local millage rates and other factors. While tax bills will likely be higher, this formula change will moderate the amount of increase.

Farm Bureau has already begun discussions on further adjustments to the CAUV formula with the tax department and its Agricultural Advisory Committee.

Among those options are making the formula better reflect the value of land for farming and be less affected by non-farm factors. Farm Bureau is also raising concerns with tax officials about minimum values, treatment of conservation lands and woodlands and the current method of factoring an average millage rate into values, which negatively affects the most vulnerable farmland in areas threatened by development.

OFBF thanked Tax Commissioner Joe Testa and his staff for being responsive to the needs of Ohio’s farm community.

The recommendations forwarded by Farm Bureau came following thousands of hours of work by members and staff who conducted research and held meetings with tax experts, state and local tax officials, accountants, attorneys, appraisers, farmers, landowners and other stakeholders. Farm Bureau’s goal was to identify adjustments to the formula that provide relief to landowners and protect the integrity of the program.

Ohio Farm Bureau members will receive more detailed information through the organization’s publications and e-letters.

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CONTACT: Joe Cornely

PHONE: (614) 246-8230

E-MAIL: [email protected]

About CAUV: CAUV is Ohio’s most effective tool for preserving farmland. Under the program, farmland is taxed on its agricultural productivity rather than its development value. The formula is highly complex and incorporates factors such as soil type, cropping history, crop prices, yields, non-land production costs and interest rates.

Farm Bureau’s goal was to identify adjustments to the formula that provide relief to landowners and protect the integrity of the program.