A National Review of State Preferential Property Tax Programs: Challenges and Opportunities for Agroforestry Practices in the United States

Abstract

Agroforestry practitioners face numerous barriers, including narrowly focused agricultural and forest land support programs that are targeted toward conventional crop and timber production. Preferential property tax programs (PPTPs) are one of the critical support programs that offer economic relief for landowners of enrolled lands. However, eligibility criteria for these programs may prevent inclusion of agroforestry lands, and thus, disincentivize the diversification of working lands. This study reviewed State statutes, administrative rules, tax guides and manuals, and other supporting publications to determine the compatibility of PPTPs for agricultural, forest, and horticultural lands with the characteristics of agroforestry systems. Results suggest that at least one of the five agroforestry practices of interest may be eligible for preferential assessment in each of the 50 States. PPTPs for agricultural lands may welcome a mixed agriculture-forestry interface more than PPTPs for forest lands. Silvopasture was found to be the most common practice potentially allowed under the preferential tax classifications. Productivity and land cover requirements and prohibited activities were identified as the primary limiting factors restricting eligibility of agroforestry practices. The findings from this study may be used to inform discussions related to landowner decision making and natural resource policy.

Supplement: Potential compatibility of preferential property tax programs with agroforestry based on publications collected between 2020 and 2023

Keywords

tax incentive
, silvopasture , alley cropping , windbreak , riparian forest buffer , forest farming , valuation and appraisals

Citation

Chizmar, Stephanie; Parajuli, Rajan; Lamichhane, Sabhyata; Frey, Gregory E.; MacFarland, Katherine; Pinyan, Mary "Mimi"; Teague, Suzanne. 2025. A national review of State preferential property tax programs: challenges and opportunities for agroforestry practices in the United States. Gen. Tech. Rep. WO-106. Washington, DC: U.S. Department of Agriculture, Forest Service, Washington Office. 40 p. http://doi.org/10.2737/WO-GTR-106.