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Two amendments to the Texas Constitution permit agricultural and open-space land to be taxed generally on its agricultural use, or productivity value. This means that taxes would be assessed against the productive value of the land instead of the selling price of the land in the open market.

The legal basis for special land appraisal is found in the Texas Constitution in Article VIII, Sections 1-d and 1-d-1. The two types of land and valuation are commonly called “ag-use” or “1-d” and “open-space” or “1-d-1.” The corresponding provisions of the Texas Property Tax Code are Sections 23.41 through 23.46, Agricultural Land, and Sections 23.51 through 23.57, Open-Space Land.

The purpose of the two provisions is similar. Under both provisions, the land must be in agricultural use and is valued in the same manner. However, there are differences in the qualifications that must be met in order to receive the productivity valuation.

Ag-Use, 1-d, qualifications include:

1. The land must be owned by a natural person. Partnerships, corporations, or organizations may not qualify.
2. The land must have been in agricultural use for three years prior to claiming this valuation.
3. The owner must apply for the designation each year, and file a sworn statement about use of the land.
4. The agricultural business must be the land owner’s primary occupation and source of income.

Open-Space, 1-d-1, qualifications include:

1. The land may be owned by an individual, corporation or partnership.
2. The land must be currently devoted principally to agricultural use to the degree of intensity generally accepted in the area.
3. The land must have been devoted to a qualifying agricultural use for at least five (5) of the past seven (7) years.
4. Agricultural business need not be the principal business of the owner.
5. Once an application for 1-d-1 is filed and approved a landowner is not required to file again as long as the land qualifies unless the chief appraiser requests another application to confirm current qualifications.

The possibility for a “rollback tax” exists under either form of special land valuation. This liability for additional tax is created under 1-d valuation by either sale of the land or a change in use of the land. It extends back to the three years prior to the year in which the change of sale occurs.

Under 1-d-1, a rollback is triggered by a change in use to a non-agricultural purpose that would not qualify for productivity valuation. Taxes are rolled back or recaptured for the five years preceding the year of the change.

The additional tax is measured by the difference between taxes paid under productivity valuation provisions and the taxes which would have been paid if the land had been put on the tax roll at market value.

These provisions are effective only if applications are filed with the appraisal district office in a timely manner. Applications should be filed between January 1 and before May 1.

Applications received with a postmark date after April 30 but before the appraisal roll is certified are subject to a penalty for late filing. Applications received after the appraisal roll is certified cannot be considered and must be filed again the next year.



Guidelines have been established by the Central Appraisal District for the implementation of these provisions. It is the opinion of the Central Appraisal District and the Agricultural Committee that Agricultural Land Qualification Guidelines are valid for mass appraisal purposes and can be applied uniformly throughout Wharton County.

These guidelines are supported by Section 183 of the Internal Revenue Service Regulations.

It should be noted that these guidelines are to be used as a general guide for qualifying agricultural land. Exceptions to the general rule will be handled on a case by case basis.

1. Prudent – capable of making important management decisions; shrewd in the management of practical affairs. Specifically the law states that the land must be utilized as would an ordinary and prudent manager in the area of the taxing unit.
2. Substantial – ample to satisfy; considerable in quantity. Specifically, the law states that the agricultural land must be an identifiable and substantial tract of land. This means that the tract must be of adequate size to be economically feasible to farm or ranch. Thus, when two small tracts are used together, they may become a substantial amount of land; when used separately they may not be.
3. Typical – exhibiting the essential characteristics of a group. Specifically, the law states that Ag land will be utilized as would a typically (ordinary) prudent manager. Statistically, a typically prudent manager is the median farmer or rancher.
4. Agricultural Use to the Degree of Intensity Generally Accepted in the Area – farming or ranching to the extent that the typically prudent manager in the area of the taxing unit would farm or ranch on an identifiable and substantial tract of land when the tract is devoted principally to agricultural use. A better understanding of the definition can be gained by identifying the key elements of the definition and explaining each as follows:
   1. Degree of intensity generally accepted in the area shall mean that the farming and ranching practices (cropping patterns, planting rates, fertilization methods, harvesting and marketing techniques, etc.) are those of a typically prudent farm or ranch manager.
   2. Typically prudent farm or ranch managers are ordinary farmers in terms of acres farmed as well as management ability. Given that all other factors remain constant, the number of acres farmed determines that farmer’s capital structure. Typical prudent farmers or ranch managers located in Wharton County are assumed to have similar equipment of similar value and utility.
   3. Simply stated, a substantial tract is a tract of land large enough to be farmed by itself in a typically prudent manner.
   4. Area is interpreted to be that land inside the jurisdictional boundaries of the Central Appraisal District of Wharton County.
   5. Principally means the more important use in comparison with other uses to which the land is put.

• 1 Cow = 1 A.U.
• Cow & Calf = 1 A.U.
• Horse = 1 A.U.
• Bull = 1 1/2 A.U.
• 2 – 500 Pound Calves = 1 A.U.
• 2 Colts = 1 A.U.
• 6 Goats & Sheep = 1 A.U.
• 2 Miniature Horses = 1 A.U
• 2 Miniature Donkeys = 1 A.U.

• Good – 1 animal unit per 1-3 acres
• Average – 1 animal unit per 4-8 acres
• Poor – 1 animal unit per 8-15 acres

The Texas Constitution permits special agricultural appraisal only if land and its owner meet specific requirements defining farm and ranch use. Land will not qualify simply because it is rural and has some connection with agricultural. Casual uses such as home vegetable gardens, hobby farming and ranching, or incidental cutting and baling of hay do not really constitute a qualifying agriculture use.

The following guidelines have been developed by Wharton County Central Appraisal District based on what is typical to this area:

1. The land must be currently devoted principally to agricultural use and the principal use of the land for five (5) of the last seven (7) years must have been agricultural.
2. Agricultural use of a property must be recognizable with the property maintained in a manner that would indicate prudent management.
3. The land must be utilized to the degree of intensity that is generally accepted in Wharton County.
4. It must be a substantial tract of land that is adequate to support a typically prudent operation and be of a useable management size for the activity involved.
5. The land must be producing an agricultural product intended for sale including but not limited to: livestock, crops for human or animal food, seed or fiber crops, etc.
6. Operator may be asked to provide documentation of management practices, expenses and sales, if necessary. For example – feed/fertilizer invoices, equipment invoices, sales receipts, labor expenses, IRS Schedule F.
7. Operator may be asked to show evidence that he is not engaged in a hobby according to the guidelines set out in Reference Section 183 of the I.R.S. Regulations. ( See Attached)

These guidelines are used as a general guide for qualifying land. There may be circumstances in your agricultural operation, which allow it to qualify based upon its own merit. Very rare exceptions to the general rule will be handled on a case by case basis.

1. Manner in which the taxpayer carries on the activity. Does the taxpayer go about the activity in a business-like fashion keeping books and records, and does he operate as similar businesses are operated?
2. The expertise of the taxpayer or his advisors. Where the taxpayer has no expertise, does he seek it, and does he follow the advice once found?
3. The time and effort expended by the taxpayer in carrying on the activity. Are either the efforts of the taxpayer or his qualified assistants consistent with the size of the investment and a profit motive?
4. Expectation that assets use in activity may appreciate in value. Lack of current income may be offset by the possibility of asset appreciation.
5. The success of the taxpayer in carrying on other similar or dissimilar activities. A long uninterrupted history of losses will be harmful, but the presumption noted above will operate if the taxpayer has a profit in two years out of five ( or seven) .
6. The taxpayer’s history of income or losses with respect to the activity.
7. The amount of occasional profits, if any, which are earned. If profits are generated, their size in relation to prior or later losses will be considered.
8. The financial status of the taxpayer. If the taxpayer has sufficient wealth to suffer losses, that indicates a non-profit motive.
9. Elements or personal pleasure or recreation. If the taxpayer has personal motives or engages in the activity for recreational purposes, his overall profit motives will be suspect.

* Exemption Department should disregard. Not applicable under the Texas State Property Tax Code Guidelines. This shows that even the IRS has trouble in identifying actual farming endeavors or just “write-offs”.


Only the acreage actually used agriculturally may qualify for ag-use 1-d-1.

Small acreage with a home built upon the tract is primarily residential in nature, with ag-use secondary. Open space land must have ag-use as its primary use in order to qualify for ag-use. Therefore will not qualify, but may all be homesteaded.

If the County is declared an agricultural disaster area, a pasture may lay out of agricultural production due to drought and excessive heat and keep the ag qualification. However if a pasture lays out of production for longer than one (1) year the land may lose its ag qualification.

Tracts of land that do not meet the minimum acreage may qualify if used with a larger operation that meets or exceeds the qualifications as a whole.To be considered part of a larger operation, the primary operation must be within a reasonable distance of the smaller tract for a prudent operator to justify the travel and expense and be worked by the same operator with written documentation of the lease agreement. Documentation of cuttings, planting, harvesting or other proof will be required for the tract that does not meet the minimum requirements

Small tracts in the city limits that would otherwise meet all the qualifications, except for being in the city limits, will be grandfathered in. If the tracts continues to be used as described above with a larger operation, it may retain the ag appraisal until it is sold. It must meet the minimum size and usage standards. No new ag applications for lots in the city limits will be granted.

• 1 Cow = 1 A.U.
• Cow & Calf = 1 A.U.
• Horse = 1 A.U.
• Bull = 1 1/2 A.U.
• 2 – 500 Pound Calves = 1 A.U.
• 2 Colts = 1 A.U.
• 6 Goats & Sheep = 1 A.U.
• 2 Miniature Horses = 1 A.U
• 2 Miniature Donkeys = 1 A.U.

• Good – 1 animal unit per 1-3 acres
• Average – 1 animal unit per 4-8 acres
• Poor – 1 animal unit per 8-15 acres

• Six Acre Minimum – 5 Animal Unit Minimum
• Degree of Intensity (Stocking Ratios)
• 1 Animal Unit = 1 Cow
• 1 Animal Unit = 1 Cow/Calf
• 1 1/2 Animal Unit = 1 Bull
• 1 Animal Unit = 2 500 Pound Calves

Pastures with 6 - 15 acres must have 5 animal units.
Above 15 acres the normal stocking rate is applicable.
Cow/Calf - This operation is in the business of raising beef for sale to either processors or to other operators for breeding stock.
Feeder/Stock - This operation is in the business of raising beef for processors. Must be on feed for 150 days and the intensity would double.

• Management practices:
• Fences Maintained
• Fertilize
• Stock Water
• Marketing
• Weed Control

Six Acre Minimum – 5 Animal Unit Minimum (30 head)
Degree of intensity (stocking ratios)
1 animal unit = 6 goats &/or sheep
This operation is in the business of providing two by-products wool/mohair & meat.

• Management practices:
• Fences maintained
• Stock water
• Market (wool/mohair &/or meat)

• Six Acre Minimum – 3 Animal Unit Minimum
• Degree of intensity (stocking ratios)
• 1 animal unit = 1 mare
• 1 animal unit = 1 mare & foal
• 1 animal unit = 1 stallion
• 1 animal unit = 2 miniature horses

This operation is directed to breeding operations. By-products are colt & fillies. This operation involves having brood mares. Usually includes special facilities & pasture is normally coastal.

• Management practices:
• Fences maintained
• Stock water
• Marketing
• Breeding Records

• Five Acre Minimum
• Degree of intensity
• 4 round/100 square bales per acre per year. (4000 lbs per acre)
• Minimum two cuttings per year.

This operation involves the cultivation of planted or maintained grasses.
Proof of baling receipts, proof of sales, proof of ownership of cattle may be required.

• Management practices:
• Fertilize
• Apply herbicide
• Cut/bale
• Limited grazing
• Market or used for personal livestock feed.

PROPERTY CUT OCCASIONALLY TO CLEAR THE GRASS/WEEDS WILL NOT QUALIFY FOR AG-USE.
Ten Acre Minimum
This operation involves the cultivation of the soil for planting grain crops with the intent of harvest for sale or for feed. Turf Grass must be a wholesale operation.

• Management practices:
• Shredding previous crop
• Planting
• Apply herbicide
• Harvest
• Tillage
• Fertilize
• Insect control

Five Acre Minimum Degree of intensity
Pecan/Fruit Trees – 15 trees per acre
Vineyard - 100 per acre
This operation is in the business of cultivating & growing of trees or grapevines that produces crops of nuts & fruit.

• Management practices and documentation:
• Weed control
• Insect control
• Fertilizer
• Pruning
• Supplemental water
• Harvesting

Six Acre Minimum
Deer – Minimum of 12 adult head for pastures of less than 15 acres. Above 15 acres regular stocking rates apply.
Ostrich/Emus – 50 adult head & only the fenced area may qualify for ag-use.

This operation is in the business of raising breeds that are not native to Texas for supplying meat and/or leather for the specialty markets.

• Management practices:
• Seven to eight foot perimeter fence
• Market for meat and or leather
• Maintain harvesting schedule

© 2009 Beyond Appraisal, Inc.