Minnesota’s large amount of agriculture and timber land has impacted the funding schools receive from communities for their facilities and led lawmakers to develop a tax credit to provide support to taxpayers and students.
The latest Ag2school tax credit increase will go into effect this year as it provides owners of agriculture and timber land a 55 percent credit on school bonds.
MREA illustrates the impact of that increase in this map. View the interactive map.
How it Works
Ag2School was conceived and passed in 2017 to increase the state share in districts in which farmers were paying an outsized portion of districts’ facility debt. Learn more
The Ag2School Ag Bond Credit has been increasing each year as it is set to scale to 70 percent in 2023. This is on all existing Fund 7 debt levies excluding OPEB bonds.
Ag2School reduces bonded debt taxes for holders of agriculture and timber land in 296 school districts.
Concentration
The highest concentrations of agriculture and private timberland as a percentage Net Tax Capacity (NTC) are in western Minnesota, as shown in red in the map to the right.
- The statewide median percentage is 27.5 percent.
- One-quarter of the school districts have over 64 percent of their NTC in agriculture or timber land.
The school districts highlighted in red and orange exceed the median.
Ag2School Phases to 70%
The Ag2School tax credit on school bonds will increase to 70 percent over the next three years. This is permanent law enacted through the tax bill by the Minnesota Legislature.
| Taxes Payable Year |
Percent Increase in Ag2School |
Total Ag2School Credit Percent |
| 2021 | 5% | 55% |
| 2022 | 5% | 60% |
| 2023 | 10% | 70% |
