Source: FARM DOC DAILY, UNIV. OF ILLINOIS, 3/10/17

All 50 U.S. states provide some form of preferential tax treatment for agricultural land. These tax policies were adopted state-by-state in response to the rapid loss of farmland associated with the rapid expansion of urban land use activities, following World War II. The majority of States tax farmland through a form of use-value assessment. Under use-value assessment, agricultural lands are taxed according to the potential earnings from agricultural production, rather than the full market value of the property. The goal of these programs was to limit farmers' tax liability based on the belief that, in many areas, farmland market values were predominantly driven by the potential conversion to non-agricultural uses, such as housing or commercial development. The mechanisms used to measure potential earnings from agricultural have come under fire in a number of states, as a result of the recent declines in farm profitability. Farmers in a number of states have argued that the measures of "potential" earnings drastically lag the realized decline in farm profit margins

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