America's Dumbest Tax Loophole: The Florida Rent-a-Cow Scam

The total cost of these abuses isn't clear, but there are hints that it may be significant. According to a 2006 Associated Press article, the law costs Florida $950 million a year total. Some of the breaks go to legitimate commercial farms. But according to the Herald's 2005 investigation, more than two-thirds of the loophole's top 60 beneficiaries in South Florida weren't farmers. 

"This thing's a game. Always has been since I've been here," one cattle rancher told the paper. 

'NO BABY TO SPLIT'

In 2006, Geller, who chaired the Florida Senate's Agriculture and Consumers Services Committee, tried to reform the game. His attempt was inspired by a property he passed each day on his morning commute. The owners had cleared it for development by removing the trees and grass, collapsing the field in the process. 

"They called Hertz rent-a-cow and three or four cows showed up on this property the next day," Geller said. Thanks to the livestock, the landowners got to keep their tax exemption. Geller later learned about another case where the developers held on to their low rate even as they began bulldozing roads through their property. The construction crews were forced to shoo cattle away as they plowed through.

"If you've got a bulldozer on the property putting on the roads, it's not agriculture, despite the presence of four cows," Geller said.

In spite of these absurdities, Geller said he still saw the need to safeguard farmland. He decided to try and hash out a compromise with the state's farm lobby that would restrain some of the more flagrant abuses of the loophole. For instance, he suggested that, like other states, Florida could require property owners to pay back a few years worth of tax savings if they started developing their land. No deal. He suggested requiring farmland to actually make money to qualify for the exemption. No deal.

"There is no compromise that Solomon the Wise could have come up with that would have satisfied the ag guys," Geller said. "There is no baby to split."

"Part of the problem, he said, was that in Florida, developers and farmers are frequently one in the same. Dairy owners and orange growers often cash out their operations by turning fields into condos.

Geller eventually introduced a reform bill that died in committee. But two years later, the legislature did quietly pass a change to the the greenbelt law: They made it easier to claim the exemption even if your land was probably too small for commercial farming.

After the 2006 reform effort failed, the director of the Florida Farm Bureau told the AP he believed "The Greenbelt Law has achieved exactly what the legislature said it wanted to achieve." By that, he presumably meant agricultural land. But the sad irony is that Florida has lost has more than 40 percent of its farm acres since 1954. That shouldn't be a surprise. After all, the law makes it cheaper to buy land, then hold it until the market is ripe for building.

But why was my mother just "basically" right? Turns out, the greenbelt law does have one reasonable boundary: residential properties don't qualify for the exemption. That might sound like common sense. But for years, Colorado's own version of the statute let celebrity landowners like Tom Cruise shrink the tax bills on their vacation homes by letting a few sheep graze nearby. The state legislature there has since taken some small steps to fix the problem.

So in Florida, you cannot in fact park some livestock on your lawn and claim a write off. Even the dumbest of laws have limits.

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Jordan Weissmann is a senior associate editor at The Atlantic.

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