Pressure applied to kill tax loophole

Farmers Union targets large-scale producers

Associated Press

DES MOINES -- Some factory farms producing cattle, hogs and chickens avoid paying thousands of dollars in property taxes because they take advantage of a loophole in Iowa tax law, farm activists said last week.

"We want large-scale producers to be accountable to their communities," said Chris Peterson, president of the Iowa Farmers Union.

Peterson joined other activists and county government board officials at a Statehouse news conference, where they said they want the Legislature to treat livestock farms as commercial property, rather than agricultural land.


Currently, farms may apply for a pollution control tax exemption offered through the Department of Natural Resources. Because livestock farms have a lagoon or pit system to treat manure or store it, they are eligible for the tax break.

The activists said it's time to change the law and pass a proposal that is in the House Ways and Means Committee to collect property taxes from the corporate farms.

One corporate-owned farm with two confinement buildings in Humboldt County pays only $495 in property taxes each year, said Jim Gustafson, a Humboldt County supervisor.

"If those were taxed as commercial, it would be over $1,600," Gustafson said, adding that local control also would allow counties to apply zoning laws when determining where farms should and shouldn't be built.

Groups supporting livestock farmers argue that the changes in law would also hurt the small family farmer.

The tax exemption has been available for 30 years and is intended to encourage environmental protection, said Tim Bierman, president of the Iowa Pork Producers Association.

"I'm really surprised that somebody would be against a little help against any pollution," Bierman said. "It's kind of a backwards step."

Meanwhile, the number of small farmers continues to drop as more confinements, some containing thousands of hogs or millions of chickens, are built across the state. Gustafson said that's proof that changes in agriculture haven't been healthy for the state.


"I think the way we are going definitely shows that is not the right approach for the family farmer and animal livestock production in Iowa," Gustafson said.

If the big producers don't pay property taxes, the burden falls on other people, said Lisa Davis-Cook, director of Iowa Citizen Action Network.

"When this gets included into the county tax formula, it means that other agricultural property owners must pay more property tax to make up the difference," she said.

"This amounts to a direct subsidy to factory farms, which is paid for by the family farmers and rural residents who have to put up with the stench, the degraded environment, and decreased property values," she said.

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