Understanding all you need to know about beekeeping for agricultural ‘exemption’ is daunting, and getting information from your appraisal district can be a little intimidating.
And…
It can be somewhat complex, but there are a few things you need to know to make this easier for you.
This post is designed to walk you through the requirements for raising bees for a tax break, minimum and maximum acreage and an estimate of money you could save.
Are we Talking About Ag Exemption or Special Valuation?
Let’s get this out of the way first. When you talk to the appraisal district, they sometimes balk at the word “exemption”. They call it special valuation. It might be good for you to use that term when you talk to them, but let’s face it, regular folks just call it ag exempt.
Why does the State Offer an Agricultural Tax Break for Beekeeping?
According to the State Comptroller’s Office “The aim is for landowners to realize property tax savings to encourage them to continue to produce vital agricultural products, such as livestock, cotton, timber, milk and corn
How Many Acres Does the Law Allow for Keeping Bees?
Texas law restricts the property covered by this valuation to between 5 and 20 acres, so you must have at least 5 acres to qualify. Many counties remove an acre for buildings or a homestead. In that case you would need 6 acres to qualify.
What Does the Law Say About Property Tax and Bees?
The law covering agricultural use related to beekeeping is Texas Tax Code under Chapter 23, Subchapter D, Section 23.52 (1) and (2). The change from 2012 allowing beekeeping is in the last sentence of paragraph (2).
“(1) “Qualified open-space land” means land that is currently devoted principally to agricultural use to the degree of intensity generally accepted in the area and that has been devoted principally to agricultural use or to production of timber or forest products for five of the preceding seven years or land that is used principally as an ecological laboratory by a public or private college or university. Qualified open-space land includes all appurtenances to the land. For the purposes of this subdivision, appurtenances to the land means private roads, dams, reservoirs, water wells, canals, ditches, terraces, and other reshapings of the soil, fences, and riparian water rights. Notwithstanding the other provisions of this subdivision, land that is currently devoted principally to wildlife management as defined by Subdivision (7)(B) or (C) to the degree of intensity generally accepted in the area qualifies for appraisal as qualified open-space land under this subchapter regardless of the manner in which the land was used in any preceding year.
(2) “Agricultural use” includes but is not limited to the following activities: cultivating the soil, producing crops for human food, animal feed, or planting seed or for the production of fibers; floriculture, viticulture, and horticulture; raising or keeping livestock; raising or keeping exotic animals for the production of human food or of fiber, leather, pelts, or other tangible products having a commercial value; planting cover crops or leaving land idle for the purpose of participating in a governmental program, provided the land is not used for residential purposes or a purpose inconsistent with agricultural use; and planting cover crops or leaving land idle in conjunction with normal crop or livestock rotation procedure. The term also includes the use of land to produce or harvest logs and posts for the use in constructing or repairing fences, pens, barns, or other agricultural improvements on adjacent qualified open-space land having the same owner and devoted to a different agricultural use. The term also includes the use of land for wildlife management. The term also includes the use of land to raise or keep bees for pollination or for the production of human food or other tangible products having a commercial value, provided that the land used is not less than 5 or more than 20 acres.”
You don’t have to sell honey. (You do have to produce something of value)
Be aware that you don’t have to sell honey or hive products to qualify. You simply have to produce food or other tangible products having a commercial value. The key word is “produce”. You can consume it or gift it.
There is a small technicality here…
When you apply with the appraisal district you will be applying for a 1-D-1 valuation. There is an old 1-D valuation that requires profit. It does not apply to you.
So… How Many Hives Do You Need?
Although the rules vary from county to county, many counties require between 6 and 12 colonies of bees but some counties are requiring less, so check with your appraisal district. How many colonies you need are called “intensity” by the appraisal district.
Our friend, Dennis Herbert of Conservation 1, was instrumental in getting the beekeeping law passed in Texas. He has worked untold hours to compile a list of general “intensity” requirements for each county.
You Don’t Have to Become A Beekeeper (But you can if you want to)
You can buy and manage the bees yourself, or appraisal districts allow you to have someone else manage bees on your land. You may be able to find beekeepers in your part of the state to provide and work bees for you. We lease and manage colonies for landowners seeking ag valuation in Kendall, Gillespie and Blanco counties. Our ultimate goal is to help you manage the bees yourself.
Agricultural Valuation Can Save Some Serious Money
Ag value savings depend on the difference between the market value of your property and the production valuation your receive from your appraisal district. It is not uncommon for the savings to be over $1000 per year. The higher the market value of your property now, the greater the savings.
If your property is currently ag exempt because you have a history of agricultural use, it is immediately eligible to move to beekeeping.
And there is an expensive problem….
If you land is currently valued as ag, if you don’t maintain ag usage, you can be hit with rollback taxes. Rollback tax is the difference between the tax at market value and ag production value… for 5 years! Don’t let this happen to you.
If it is not ag exempt now, you will usually be required to build a 5 year history of ag use to qualify for special valuation savings.
Let me be clear about one important thing…
Buildings do not usually qualify for agricultural valuation. There might be a very rare exception but barns, honey houses and any permanent structure will be appraised at market value.
Personal Property Taxes for a Bee Farm (another way to save)
Real property taxes for agriculture are the taxes on real estate. Real property also includes buildings. Personal property is anything else you use to manage your bees. As a farm, in Texas you may be required to file a General Personal Property Rendition form with your appraisal district each year by April 15th. The appraisal district will send you a rendition form if you are required to submit it.
The Texas Manual for the Appraisal of Agricultural Land says “Machinery and equipment that are used in the production of farm or ranch products or of timber are implements of husbandry and also are exempt.” When you are listing property on the rendition form, the first column is for Property Description
by Type/Category. Simply write “Ag Production” in this column. Without getting too far in the weeds here, anything that is used before you bottle honey is exempt. Bottles, any equipment for bottling or labeling are not exempt.
But there is another exemption…
There is another $500 exemption for personal property (bottles, labels…) not covered in the agricultural exemption. It is called the EX366 exemption. You may have to render (send the list of ) your property, but with these exemptions it is unlikely that you will have to pay any personal property tax unless you begin to process a very large amount of honey.
Joe and Lolita Bader
Texas Advanced Master Beekeepers