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Where the Taxes are Low Every Day

Brief by Central Staff

Local Politics – February 1999 – Colorado Central Magazine

Home, Home on the Range,

Where the taxes are low every day

According to the Census Bureau, Custer County is the fourth-fastest-growing county in the United States. But its assessed valuation dropped by about $1 million last year, from $44.7 million in 1997 to $43.7 million in 1998.

How did that happen?

Start with the 10,000-acre Bull-Domingo Ranch, which has been subdivided into those ubiquitous 35-acre ranchettes.

When that happens, the land normally changes from agricultural use, with a low assessment, to residential use, with a higher assessment.

But the Bull Domingo Homeowners Association exploited a loophole in state law, according to J.D. Henrich, Custer County assessor.

The homeowners lease most of their 35 acres (or all, if they haven’t built on the land) for cattle grazing for $1 per acre per year, thereby making the land fall into the agricultural category.

The tax difference is substantial — a typical 35-acre lot would pay $500 to $800 a year in property taxes if it’s residential, but $10 to $15 a year if it’s agricultural, on account of the lower valuation.

Thus Custer County’s drop in valuation, even as it grows rapidly.

Assessor Henrich said “Almost every subdivision with 35-acre-plus lots here is doing it. It’s a loophole in the law that was designed to protect legitimate agricultural operations. That loophole is being abused and it is happening statewide.”

People might make fun of you if you’re a drug-store cowboy, but apparently it pays off when the property tax bill comes.