Agricultural Valuation
Ag valuation can cut your property tax bill on rural land
In this farming and ranching county, land actively used for agriculture is taxed on its productivity value — not its full market value — which can mean a much lower tax bill.
Texas law lets farm and ranch land be taxed on what it can produce — not what it could sell for. This is called ag special valuation (or ag exemption). In Sherman County, wheat fields and cattle operations cover most of the land. The gap between productivity value and market value can be very large. That gap means a much lower tax bill for working landowners.
To qualify, the land must have been used for agriculture for at least five of the past seven years. It must also meet local use standards set by the Sherman County Appraisal District (SCAD). You apply directly with SCAD.
Watch out for the rollback tax. If you stop farming and change the land to another use, you owe back taxes. The rollback covers the difference between what you paid and what full market-value taxes would have been — going back three years. Check the Texas Comptroller's page for the full rules before you buy or change the use of rural land.
Source to confirm: Texas Comptroller — Agricultural and Timber Special Appraisal