Letting our aging farmers and their tax burdens retire
Although farmers have a high degree of freedom and flexibility when it comes to running their farms, they may feel their ability to retire is constrained. Many retirement-age farmers are finding it extremely difficult to structure their retirement income with the scaling back of daily operations.
After meeting with a local area farmer, Rep. Vicki Kraft discovered just how hard retiring from farming can be. At 80-years-old, the farmer she met with had more than reached the age of retirement. Although he is no longer able to work his land, he cannot afford to remove it from its agricultural use tax status. The fees and penalties are too great. As a result, he is forced to produce hay at a loss.
In 1970, Washington state passed the Open Space Taxation Act. This law allows farm and agricultural land, including timberlands, to be valued based on its “current use.” That means the land’s appraisal is dependent on what it’s used for, rather than its highest market value. However, when land is removed from this status, it’s subject to seven years of tax, interest and penalty. For aging farmers, this means if they decide to retire and sell their land, they must pay seven years of back taxes and fees based on the land’s highest possible value.
Making the decision to retire is not always easy. For some farmers, this law is making it close to impossible.
During the 2018 session, Kraft is proposing legislation that would permit retired farmers, or those seeking to retire, to remove their land from current use status without being subject to additional tax, penalty or interest. The bill would only apply to farmers who worked their land for 10 years or more and have reached the age of retirement of 60-years-old, or for reason of disability were no longer able to work their land. In addition, veterans with a disability rating for a service related injury would also qualify.
Whether we are farmers, manufacturers, teachers, or whatever it is that we do, there comes a time we are no longer able to work. Farmers, just like other occupations, deserve an unrestricted pathway to retirement. Kraft’s bill would apply the same type of criteria as many other professions, to farmers, giving them the opportunity to rest from their labors and the land they cultivate.