ThinkProgress noted last year that multi-millionaire movie star Tom Cruise manipulated a tax break meant to help struggling farmers in order to pay just $400 of property taxes on his $18 million Colorado estate. Cruise was able to pay so little because he allowed some sheep to graze on the estate, thus qualifying the land as agricultural and making it eligible for a big tax break.
According to the Miami Herald, Sen. Bill Nelson (D-FL) has done much the same thing, letting cows graze on a plot of land that he owns, which dramatically lowered his tax bill:
Thanks to a half-dozen cows that graze Nelson’s 55 acres on the Indian River, he saved $43,000 in property taxes last year…The land has a full market value of $2.7 million, but the county tax collector uses the agricultural value of $210,000. That reduced Nelson’s tax bill in 2011 to $3,696. […]
Nelson’s property may never have draw attention but over the years he has put some of it up for sale, netting at least $1.4 million. Three of the five lots were not classified as agriculture, according to records he provided to the Times. Two others were agriculture, as is a sixth lot he currently has for sale at about $540,000. On those, he has gotten the benefit of low taxes before selling at market value.
“I pay all the taxes owed on the pasture land,” Nelson said, defending the tax break. “This pasture has been in my family since 1924 and it’s been a cow pasture since 1950.” But this doesn’t change the fact that the state lost much needed revenue on tax breaks that were meant to aid family farmers, but instead went to land that is decidedly not a farm.
As Citizens for Tax Justice pointed out, there’s an easy fix for this problem, as states could just “replace current agricultural land valuation systems with an agricultural circuit breaker that makes property tax relief available only to real family farms.” “This would not only ensure that Senators and movie stars do not abuse the system, it would also better target those farmers most in need of property tax relief — the farmers for whom the tax loopholes were presumably written in the first place,” CTJ noted.