“Ag exemption” gets said like it’s one thing. In Mississippi it’s really two separate breaks — one on your property taxes, one on sales tax when you buy equipment — and they live at two different offices. Here’s both, in plain English, because we had to figure this out for our own place.
- Property tax: land in commercial agricultural use is appraised on its use value (what it produces), not its market value (what a developer would pay). You request this classification at your county tax assessor’s office.
- Sales tax: farm tractors and implements are taxed at a reduced 1.5% instead of the standard rate — you sign a Farmer’s Affidavit (Form 72-620) at purchase.
- Watch 2026: a bill to eliminate that 1.5% entirely (SB 2272) passed the Mississippi Senate 50–1 this session. Not law yet as we write this — we’re watching it.
Break one: use-value assessment on the land
Mississippi law (Miss. Code §27-35-50) says land devoted to the commercial production of crops, timber, livestock, or poultry gets appraised on its productive use value rather than its market value. The state hands the county a formula — soil types, productivity, an income-capitalization approach — and the county appraises off that instead of off what the land would bring at auction.
Why it matters: near a growing town, market value and farm value drift apart fast. A pasture that would appraise high as future house lots can carry a use value at a fraction of that — and agricultural land is then assessed at 15% of the use-value figure. On land like that, the classification can cut the tax bill by more than half. Thirteen miles from Oxford, this is not a hypothetical to us.
How you get it:
- The land has to actually be in commercial agricultural use on January 1 of the tax year — row crops, hay, timber, cattle, poultry, an orchard. A big lawn is not a farm, and assessors know the difference.
- File an application for agricultural use value with your county tax assessor (for us that’s Lafayette County). The assessor may visit or ask for records that show real production — receipts, a timber management plan, a grazing lease.
- Keep it true. The classification follows the use. Land that quits farming loses it.
One honest note for fellow heirs: a hay lease or a grazing lease on your fields is commercial agricultural use even if you never sit on a tractor yourself. That’s one reason a simple field lease is often the first move on inherited land — it earns a little and it keeps the land classified.
Break two: the 1.5% rate on equipment
Separate law, separate office. When a farmer buys a tractor or farm implements for use in agricultural production, Mississippi charges sales tax at a reduced 1.5% instead of the standard rate. There’s no card to carry — you certify eligibility at the point of sale with a Farmer’s Affidavit (Form 72-620), swearing the equipment is for commercial agricultural production. Sign it falsely and you owe the difference, so the same honesty rule applies: the exemption follows real farming, not a rural address.
What’s moving in Jackson right now
This session, the Mississippi Senate passed Senate Bill 2272 — 50 votes to 1 — to eliminate the 1.5% on qualifying agricultural equipment altogether, replacing the affidavit with a certification permit farmers would present at purchase. As we write this it has passed the Senate, not the whole legislature, so the 1.5% and the affidavit are still the rule at the register. If it becomes law, we’ll update this page and note it in the Journal — it changes the math on every equipment purchase we’re planning.
The order we’d do it in
- Get something genuinely agricultural happening on the land — even one hay lease.
- Walk into the county assessor’s office and ask for the agricultural use-value application. It costs nothing to ask, and assessors answer these questions all day.
- Keep a folder of proof: lease copies, receipts, photos of the operation. Every break above rests on being able to show real production.
Tramel Farms is mid-process on exactly this — we’re documenting the farm’s use and preparing the Lafayette County application. When we’ve been through the assessor’s office ourselves, we’ll write down how it actually went: what they asked for, how long it took, what we’d do differently.
USDA programs worth knowing — the other half of the paperwork · You inherited farmland — the first year — where this all starts.
The plain-spoken part: we are farmers-in-training, not lawyers, accountants, or agents of any government office. This guide is the homework we did for our own place, written down so you don’t have to start from zero. Laws and programs change — before you sign or file anything, confirm the current rules with your county offices or a professional who does this for a living.