IDAPA 35.01.03.617 — AGRICULTURAL LAND VALUATION DEFINITIONS AND GUIDELINES

Section 63-205C, Idaho Code
01.
Definitions.
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a.
The actual use value of agricultural land will be the landlord's share of net income per acre,
capitalized by the annual rate required by Section 63-205C, Idaho Code, plus a component for the local tax rate. The
Actual Use Value will be considered market value for assessment purposes.
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b.
Economic rent is the average gross income per acre received by a landlord from either a cash rent
or crop share rental agreement. Only the rent solely attributable to the agricultural land is included in economic rent.
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c.
Net Income (Rent) is determined by deducting the landlord's share of all typical current expenses
from economic rent per acre.
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IDAHO ADMINISTRATIVE CODE
IDAPA 35.01.03
State Tax Commission
Property Tax Administrative Rules
Section 617
Page 47
d.
Agricultural Area is an identifiable geographical area of similar agricultural land.
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02.
Determination of Average Crop Rental Rates.
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a.
Determine the average per acre gross income from individual crop cash rents, whole farm cash
rents, or crop share typical to the Agricultural Area over the immediate past five (5) growing seasons as reported by
local farmers.
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b.
If data from local farmers is insufficient, data typical to the Agricultural Area from third party
providers, such as the United States Department of Agriculture (USDA), University of Idaho Crop Enterprise
Budgets, or similar sources, may be used.
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c.
The choice to use cash rent or crop share analysis in determining the taxable value of agricultural
land should be predicated on the quantity and quality of data available when developing a supportable value
conclusion.
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03.
Determination of Farm Credit Services Capitalization Rate.
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a.
The Tax Commission will gather the interest rate data from the Spokane office of the Farm Credit
Services, average the rate over the immediate past five (5) years and distribute the rate annually to assessors by the
second Monday in September.
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b.
The local tax rate component is the rate most applicable to the Agricultural Area.
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c.
The local tax rate will be added to the Farm Credit Services capitalization rate to develop the
overall capitalization rate.
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04.
Calculation of Net Income from a Cash Rent Analysis.
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a.
Crops Grown. Determine the crops typically grown in the area.
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b.
Economic Rent. Determine the average per acre gross income from individual crop rents or whole
farm cash rents typical to the Agricultural Area over the immediate past five (5) years.
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c.
Landlord's Expenses. Determine the landlord's share of all typical expenses paid in the
immediately preceding growing season.
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d.
Landlord's Net Income. Subtract the landlord's share of all typical expenses from the average gross
income per acre for the immediately preceding year to determine net income.
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05.
Calculation of Net Income from a Crop Share Analysis.
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a.
Crops Grown. Determine the crops typically grown in the Agricultural Area.
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b.
Average Crop Production. Determine the most recent five (5) year average production for typical
crops grown in the Agricultural Area.
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c.
Average Commodity Prices. The Tax Commission will publish five (5) year average crop prices by
surveying publicly available data from various sources, including the annual crop summary published by the USDA
National Agricultural Statistics Service (NASS). Average crop prices determined in this manner by the Tax
Commission should be considered guidelines when determining net income, subject to modification based on local
market data.
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d.
Gross Income. Multiply average crop production per acre by the average commodity price to
determine gross income per acre.
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IDAHO ADMINISTRATIVE CODE
IDAPA 35.01.03
State Tax Commission
Property Tax Administrative Rules
Section 618
Page 48
e.
Landlord's Share of Gross Income. Determine the landlord's share of gross income per acre from a
crop rotation typical to the Agricultural Area.
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f.
Landlord's Expenses. Determine the landlord's share of all typical expenses paid in the
immediately preceding growing season.
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g.
Net Income. Subtract the landlord's share of all typical expenses from the landlord's share of gross
income to determine net income.
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06.
Calculation of Grazing and Meadow Land Net Income.
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a.
Animal Unit Month (AUM) is the amount of feed the land produces to sustain a one thousand
(1,000) pound cow-calf pair, or other animal equivalent for one month.
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b.
Determine the number of AUMs by multiplying the number of cow-calf pairs, or animal unit
equivalent, grazing a land parcel by the number of months grazed.
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c.
Multiply the number AUMs by the five (5) year average of locally reported or third party provided
rents per AUM to arrive at the total AUM income.
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d.
Divide the total AUM income by the number of acres grazed to calculate the gross income per acre.
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e.
Subtract landlord's typical expenses from the immediately preceding year to determine net income
per acre.
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07.
Cross Reference. See Rules 645 and Rule 131 of these rules.
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