Taxes Too High? Rent a Cow

What is the sound of money piling up? For many property developers, it's a moo. In Orange County, Fla., investors are saving more than $7 million each year by claiming that plots being converted into shopping malls and subdivisions are farmland and qualify for property-tax breaks. Farther south, near Fort Lauderdale, "we have cows walking over pavement and grazing outside hotels," says Broward County appraiser Lori Parrish. She points to a Courtyard by Marriott, where some 40 head of cattle had cut yearly taxes on the 18-acre plot to $618.94 before the hotel opened. The herd did not check out when the Courtyard started welcoming guests last year: in 2005 the cows chewed some $58,000 off the hotel's tax bill. And it's totally legal.

Officials in Florida and elsewhere are fed up with such farming façades, which exploit tax breaks that, ironically, were meant to combat sprawl. Idaho in March eliminated its "developer's discount," which benefited nonworking farms. But in South Carolina--where a $7 million, five-acre beachfront lot on upscale Kiawah Island is taxed just $9.60 as timberland--the agricultural commissioner has said "defining what a 'real farm' is can be very difficult."

Phantom farmers get some of their strongest support from their bona fide counterparts. Last month real farmers helped quash legislation aimed at closing loopholes in Florida's greenbelt law, in part because tighter rules could impede their ability to sell their land--to developers.