Impact of Alternative Property and Sales Tax Policies on Texas Representative Farms

Abstract

The call for school finance reform has threatened to modify or possibly remove the current property and sales and use tax exemptions currently benefiting Texas agricultural producers.  This study utilizes a whole farm simulation model to evaluate the economic and financial impact of three alternative sales and/or property tax policy changes on Texas farms, dairies, and ranches along with their respective landowners.  Results indicate that removing sales tax exemptions would most adversely impact producers, while removing property tax exemptions has a more negative effect on landowners.