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xchrom

(108,903 posts)
Fri Feb 24, 2012, 11:13 AM Feb 2012

Sen. Bill Nelson Uses Six Cows To Avoid Tens Of Thousands Of Dollars In Property Taxes

http://thinkprogress.org/economy/2012/02/23/431661/bill-nelson-cows-property-taxes/

ThinkProgress noted last year that multi-millionaire movie star Tom Cruise manipulated a tax break meant to help struggling farmers in order to pay just $400 of property taxes on his $18 million Colorado estate. Cruise was able to pay so little because he allowed some sheep to graze on the estate, thus qualifying the land as agricultural and making it eligible for a big tax break.

According to the Miami Herald, Sen. Bill Nelson (D-FL) has done much the same thing, letting cows graze on a plot of land that he owns, which dramatically lowered his tax bill:

'Thanks to a half-dozen cows that graze Nelson’s 55 acres on the Indian River, he saved $43,000 in property taxes last year…The land has a full market value of $2.7 million, but the county tax collector uses the agricultural value of $210,000. That reduced Nelson’s tax bill in 2011 to $3,696. [...]

Nelson’s property may never have draw attention but over the years he has put some of it up for sale, netting at least $1.4 million. Three of the five lots were not classified as agriculture, according to records he provided to the Times. Two others were agriculture, as is a sixth lot he currently has for sale at about $540,000. On those, he has gotten the benefit of low taxes before selling at market value.'

“I pay all the taxes owed on the pasture land,” Nelson said, defending the tax break. “This pasture has been in my family since 1924 and it’s been a cow pasture since 1950.” But this doesn’t change the fact that the state lost much needed revenue on tax breaks that were meant to aid family farmers, but instead went to land that is decidedly not a farm.
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leveymg

(36,418 posts)
1. A lot of very wealthy people with land do exactly the same thing: horses and llama in Potomac, MD
Fri Feb 24, 2012, 11:30 AM
Feb 2012

Then, there's the "Therapeutic Riding Clinic" in Fredricksburg, VA. It's a scam to avoid taxes, and a nice way to have the middle-class pay for a rich person's horses and stables.

zipplewrath

(16,646 posts)
2. Trees
Fri Feb 24, 2012, 11:40 AM
Feb 2012

We had a hotelier planting trees on a vacant piece of land in the middle of the tourist strip so he could get an exemption as a "tree farm".

The closest thing to a solution to all of this is to demonstrate that the land is generating "farm income" equal or greater than the taxes.

 

rfranklin

(13,200 posts)
3. I beleive here in NJ it's only $500 income to qualify for the farm exemption...
Fri Feb 24, 2012, 11:48 AM
Feb 2012

Former Governor Christie Whitman sells $500 of firewood to her relatives and avoids tens of thousands of taxes on a huge estate.

http://www.thenation.com/article/159943/tax-day-farms-owned-rich-provide-massive-tax-shelter

Many states expanded the definition of “agricultural land” beyond land that was farmed to land that simply had not yet been developed. In South Carolina, all it takes is five acres of trees to qualify for a tax exemption. New Jersey requires that a landowner have five acres, but also sell $500 of agricultural goods a year from their farm. Publishing magnate Steve Forbes and his wife, Sabrina, qualify for their exemption by breeding show cows on their 450-acre Bedminster estate. “You don’t make money selling hamburger meat. You make money breeding show cows; that’s the name of the game,” Forbes told Fortune magazine in 1996. Florida requires a couple of cows or a herd of goats, which don’t have to be on the property all the time. Texan law is so broadly defined that the PGA Tour golf resort in San Antonio has been trying to get recognized as a “nature preserve” to get a farm tax break.

 

otohara

(24,135 posts)
4. The Colorado Loophole Took 9 Years to Overturn
Fri Feb 24, 2012, 12:10 PM
Feb 2012

We were paying way more than Gov. Hickenlooper was on his 200 acres of land in Parker CO. Turns out, the millionaire gov. first considered the "wood producer" loophole. But alas, the wood producer loophole wasn't so lucrative as the AG loophole, so he threw a goat on the land and lowered his property tax to $200.

Effing Goldie Hawn got $37,000 from Pitkin county aka Aspen for her fake farmer claim.

We pay $1500 on our little house.

Cheaters and LIARS

 

otohara

(24,135 posts)
8. Bruce Springsteen/Bon Jovi Use This Loophole
Fri Feb 24, 2012, 12:20 PM
Feb 2012

When I hear the new Springsteen song - We Take Care of Our Own, I think of this instead.


Over $30bn in tax dollars given to stars like Springsteen, Bon Jovi and Ted Turner in subsidies EVERY YEAR

Millionaires in the United States receive about $30billion annually in government subsidies according to a report released Monday by Senator Tom Coburn.

The 37-page report, dubbed 'Subsidies of the Rich and Famous,' details government payments provided to individuals with annual gross incomes of at least $1million.

Mr Coburn name-drops celebrity recipients in his report, including big players in media, music, and sports.

Read more: http://www.dailymail.co.uk/news/article-2061591/Springsteen-Bon-Jovi-Ted-Turner-30bn-tax-subsidies-EVERY-YEAR.html#ixzz1nJhwi1sg


Read more: http://www.dailymail.co.uk/news/article-2061591/Springsteen-Bon-Jovi-Ted-Turner-30bn-tax-subsidies-EVERY-YEAR.html#ixzz1nJhnSRiC

HughBeaumont

(24,461 posts)
13. This is detailed in "Perfectly Legal" and "Free Lunch".
Fri Feb 24, 2012, 12:32 PM
Feb 2012

The wealthy continually exploit these rules and get away with it because America's readership in general won't add any nutritious info like David Cay Johnston to their weepy Nicholas Sparks and lie-filled Glenn Beck books.

 

truebrit71

(20,805 posts)
16. The Daily Heil? Really? That is a UK RW fishwrap, full of gossip and strawmen...
Fri Feb 24, 2012, 01:06 PM
Feb 2012

...and celebrities in bikini's....And not much else...

 

otohara

(24,135 posts)
19. It's Still True - Sorry
Fri Feb 24, 2012, 02:49 PM
Feb 2012

Bruce, Jon Bon, Ted Turner, Goldie Hawn, Tom Cruise, John Hickenlooper - all liberals.

If it weren't true, then Colorado wouldn't have closed this outrageous loophole - and it was in wealthy Colorado Resorts, not family farms where this was being abused.

.http://www.ctj.org/taxjusticedigest/archive/2011/05/colorado_repeals_tax_loophole.php

 

joeybee12

(56,177 posts)
6. This apparently happens everywhere, every state...
Fri Feb 24, 2012, 12:19 PM
Feb 2012

And people wonder why states experinece budget shortfalls...these rules/laws need to be chanegd so people can't cheat.

 

otohara

(24,135 posts)
12. Easier Said Than Done
Fri Feb 24, 2012, 12:27 PM
Feb 2012

It Took 9 Years to Overturn in CO - they must have had some heavy hitter lobbyists fighting like crazy.

This will be the first tax year... folks like Tom Cruise, John Hickenlooper, Charlie Ergen and others will have to
pay up on their "gentleman's ranches"

 

joeybee12

(56,177 posts)
17. Oh yeah, they've got all that money they've been "saving'
Fri Feb 24, 2012, 01:06 PM
Feb 2012

from such deals to lobby to keep their little deal in place.

MineralMan

(146,324 posts)
11. There's some danger in attacking people who are wrongly
Fri Feb 24, 2012, 12:25 PM
Feb 2012

benefiting from this. The only way to win on it is to end the property tax subsidies for agricultural properties. The effect of that would be to hurt people who are legitimately using their land for agriculture. While Nelson may only graze five cows on his property, his neighbor may make his living with cattle. Yes, these wealthy people are hedging and are not actually doing real agriculture, but it's going to be difficult to end the subsidy without harming many more people who could not profit from their agricultural businesses without the subsidy, which is why the subsidies exist.

It's important not to throw babies out with bathwater, as the old saw goes.

 

otohara

(24,135 posts)
18. Colorado Repeals Tax Loophole that Made Tom Cruise a "Farmer"
Fri Feb 24, 2012, 01:15 PM
Feb 2012

A state task force reportedly found that most taxpayers affected by the change live in Colorado’s resort areas.

snip

The agricultural property tax loophole we first told you about in March was closed on Monday when Gov. John Hickenlooper signed HB1146. Tom Cruise was among the most famous beneficiaries of the loophole, saving thousands of dollars in taxes because of his decision to allow sheep to “graze around the mansions for brief periods each year.”

At this point, it remains unclear whether this new law will cause farmer Cruise to put away his shears and focus on his acting career.

Prior to the enactment of HB1146, property owners in Colorado were eligible for hefty agricultural tax breaks if they could prove that they tried to make a profit through agriculture. As the Denver Post points out, “that's a standard so lenient that some property owners qualify by letting cattle [or sheep] graze a few days out of the year.”

Unsurprisingly, many very influential people jumped at the chance to exploit this obvious flaw in the state’s tax code. In addition to Tom Cruise, the Denver Post reported that Kurt Russell, Goldie Hawn, a state senator, the state’s treasurer, an energy industry billionaire, a media mogul, and the chairman of Discovery Communications all benefited from this loophole. Countless other well-off of landowners in Colorado undoubtedly benefited as well.http://www.ctj.org/taxjusticedigest/archive/2011/05/colorado_repeals_tax_loophole.php

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