Taxation Incidence on Rented Agricultural Land: An Evaluation of Ohio's Current Agricultural Use Value Program

Tax incidence measures the extent to which land owners can increase rental rates in order to shift the agricultural property tax burden to the renters of the agricultural land. In the U.S., Ohio s Current Agricultural Use Value Program (CAUV) determines the taxable value of agricultural land based on formulas incorporating agricultural prices, yields, and capitalization rate but is determined exogenously from market expectations of land value. We estimate the property tax incidence on rental rates of agricultural land. Results indicate that cash rental rates in Ohio from 2008 through 2017 increased between $0.38 to $0.63 for each additional dollar of property tax levied on agricultural land which is similar to the related literature on government payment incidence. Acknowledgement :