Each year, big time developers in the sunshine state save millions in property taxes by, yes, renting cattle



State tax codes have a way of accumulating junk -- quirky breaks and carve-outs that grow increasingly odd as they linger on the books, like tacky old legislative souvenirs. In Alabama, you can still deduct $1,000 for building a radioactive fallout shelter. In Arkansas, blind combat veterans may buy a new car every two years tax free. In Hawaii, residents can claim a $3,000 deduction for taking care of "exceptional trees" on their property -- as long as an expert deems them "exceptional."

Often, these exemptions become the pet cause of some vocal interest group, making them near impossible to dislodge. Louisiana recently instituted an annual "second amendment weekend tax holiday," which lets shoppers buy guns, knives, blinds, and other hunting gear sans sales tax each September. You can be sure that one will be around as long as there are deer to shoot in Cajun country.

Some junk in the tax code, though, isn't merely odd. During a visit to Florida this month, I became acquainted with the state's own notoriously strange loophole which, unlike the basically benign examples above, costs untold millions of dollars every year. 


"Oh look, there they are!" my mother said, swerving the car a bit as she pointed to the side of the road. "The rent-a-cows!"

And indeed, there they were, a tiny herd of cattle -- maybe a half-dozen of them, from what I could see -- marooned in a wide, fenced-in field of grass off the highway, like the last, cud-chewing remnants of a long-vanished family farm. Perhaps they would've seemed less out of place if we weren't just a few minutes away from Medical City, the University of Central Florida's sprawling new campus of hospitals and teaching facilities that's becoming a magnet for Orlando-area developers. Its gleaming new VA hospital loomed ahead. 

My mother had been talking about the rent-a-cows since she had begun house-hunting in the area a couple of months before. It was a tax thing, she explained one day. You could rent a cow, put it in your yard, and get a property tax break. I took the story with a grain of salt. Zoe had spent the last four decades of her life living in New York City before moving to Florida for a job at UCF's medical school. I assumed something had just gotten lost in translation. 

No. Sadly, my mother was basically right.


It's known as Florida's greenbelt law. The statute is meant to preserve farmland by taxing it at special, low rate. But some of the act's biggest beneficiaries are deep-pocketed developers, who often take advantage of it by literally renting cows. 

"It's kind of symbolic of a lot of the problems we see with the tax code today," Carl Davis, a senior analyst with Citizens for Tax Justice, told me, "of how needlessly polluted and complicated and loophole ridden it is."

The greenbelt law dates back to 1959, a time when Florida's swamps and orange groves were first giving way to suburban strip malls and sub divisions. As former state senator Steven Geller said to me, it was a troubled time for farmers. Land was assessed and taxed based on its most profitable potential use, and for the most part, that meant real estate. Because citrus trees didn't offer the same returns as new condos, many farmers were forced to either sell their property or risk being priced out. The greenbelt law offered a solution by dropping rates for agricultural land. 

Other states have passed similar laws that work as intended. The problem with Florida's, Geller said, is its vague wording. To qualify for the exemption, property owners are required to use their land for "bona fide" agricultural purposes. But what does "bona fide" mean? That's far from clear. Aided by lax court rulings, developers have seized on that ambiguity by leasing out their land to cattle ranchers while they prepare to build, often shaving hundreds of thousands of dollars off their tax bills. 

What does it take to qualify for the exemption? Often just a few underfed animals roaming around a mud patch. Property owners must submit a form to the government and provide evidence that they are engaged in "good-faith commercial agriculture." They don't have to generate an income from their operations. Many have been allowed to claim the exemption even after rezoning their land for non-agricultural purposes. Others have received the break after starting construction. In its unsparing, 2005 investigation of the greenbelt law, reporters from the Miami Herald visited so-called farmland where they encountered cows eating trash in grassless fields and dead animals decomposing in the dirt. Here are couple of their descriptions:  

  • Developer Armando Codina and his partners pay ranchers to keep cows on their land in northwest Miami-Dade County so they can get agricultural tax breaks while building industrial warehouses. One so-called pasture is a soggy wasteland littered with downed trees. Months before Codina requested farmland tax breaks, he asked Miami-Dade to declare the entire site an environmentally contaminated "brownfield." 2004 property tax savings: $250,273. 
  • Cows wander amid concrete pads and utility boxes on 49 acres in Southwest Ranches, where developer Richard Bell plans to build homes priced at $1.5 million and up.... The rancher reported 16 cows last year. 2004 property tax savings: $140,168.

Other beneficiaries of the law have included Walt Disney World ($1.5 million in savings), as well as U.S. Senator Bill Nelson ($43,000 in savings), who keeps about six cows on 55 acres of land near the Indian River, courtesy of a cattle ranching operation that leases the property for free. Like Nelson, some developers simply offer their land to ranchers for no charge. Others, as the Herald noted, actually pay the ranchers -- hence the loophole's nickname, "rent-a-cow." 

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. 


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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