Data supporting Tax Calculations

Assumptions

$650Annual Lease rate (net income)/ acre paid to the landowner
7%Capitalization rate
$11,000Tangible Personal Property value / solar farm acre
• Above ground transmission power lines/wires/poles and related equipment
• AC switchgears, Meters, Breakers, Control Switches, Regulators
• AC Above Ground & Underground Cables & Connectors
• Security Systems,Communication Equipment
• Computer systems, monitor & control systems and SCADA systems
All tax rates are 2019 levels

Mason County KY’s 2019 average property tax per farmland acre

Total Acres158,080
Total acres considered farmland150,712
Total annual Property Tax from farmland$1,289,962
Average Tax from a farmland acre (Total Tax from farmland / acres considered farmland)$8.56

Calculating Property tax due on Mason County Solar Acre

First determine valuation of solar farm’s real property (land)

Valuation of a utility-scale solar acre is determine 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 DistrictTax rate / $100
————-Real Property (Land)Amount Due on a $9,285.71 Acre
School Board0.4560$50.70
County0.2290$21.26
State0.1220$11.33
Health0.0750 $6.96
Library0.0670 $6.22
Extension0.0400 $3.71
————-Tangible PersonalAmount Due ($11,000 Tangible / Acre)
County1.4180$155.98
State$49.50$49.50
————-Solar Total Tax
Payments
———————————–
Local Districts$244.84
State $60.83
Solar-Farm-Assessment-Recommended-Guidelines_2_April-2020