This $2.88 payment from an average acre of ag land is divided as follows
Tax District
Tax rate / $100
————-
Real Property (Land)
Amount Due on a $795.01 Acre
School Board
0.546
$1.64
County
0.2290
$0.68
Health
0.0750
$0.23
Library
0.0670
$0.21
Extension
0.0400
$0.12
————-
Current Farmland Total TaxPayments
———————————–
Local Districts
$2.88
All tax rates are 2020 rates
Calculating taxes due on Mason County Solar Acre
Assumptions
$650
Annual Solar Lease rate paid to the landowner (net income)/ acre
7%
Capitalization rate
First determine valuation of solar farm’s real property (land)
KY Dept of Revenue sways valuation of a utility-scale solar acre is determined based on the income approach.
The income approach is a real estate valuation method that uses the income the property generates to estimate fair value.
It’s calculated by dividing the net operating income by the capitalization rate.
$650 / 0.07 = $9,285.71
Next, we calculate the annual amount due to each tax district
Tax District
Tax rate / $100
————-
Real Property (Land)
Amount Due on a $9,286 Acre
School Board
0.5460
$50.80
County
0.2270
$21.08
Health
0.0750
$6.97
Library
0.0670
$6.22
Extension
0.0400
$3.72
————-
Solar Total Real Estate TaxPayments
———————————–
Local Districts
$88.80
All tax rates are 2020 levels
2020 tax rates
This $15 Million increase means local tax districts receive 960% more revenue from these 6,000 acres than if there is no Solar, even with no tax on solar’s tangible assets.