Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, April 9, 1991 TAG: 9104090453
SECTION: VIRGINIA PAGE: B-1 EDITION: BEDFORD/FRANKLIN
SOURCE: By DAVID M. POOLE STAFF WRITER
DATELINE: ROCKY MOUNT LENGTH: Medium
The "land-use" program has helped farmers resist economic pressures to sell out to developers. The tax break remains in effect as long as the land remains open and undeveloped.
But a loophole exists for forest land. A landowner can strip away virtually all the trees from his land and still qualify for the tax break.
Gus Forry, the Rocky Mount District supervisor, said Monday that tax breaks for forests too often are abused by land speculators, lumber companies and others.
Forry said the timber loophole defeats the purpose of the land-use program because landowners have no incentive to keep a mature stand of trees on their land.
Forry said he supports tax breaks for "farmers who are farming, not those who speculate in land."
Forry raised the issue as the Board of Supervisors studied the 1991-92 land-use budget requested by Commissioner of Revenue Ben Pinckard.
Pinckard explained that the General Assembly enacted land-use tax breaks in the late 1970s, to help preserve open land in fast-growing areas with encroaching residential and commercial development.
Pinckard acknowledged that the timber tax break is "debatable" in Franklin County, given the area's relatively low property assessments and tax rate.
"I won't go into that," Pinckard added. "It's an election year."
County records show the land-use program is popular with timber companies and owners of acreage at Smith Mountain Lake.
Land enrolled in the timber classification is assessed at $135 per acre, regardless of its true market value. Any tract of 20 or more acres can qualify for the program.
Forry questioned by Lester Lumber Co. of Martinsville should get a tax break on 6,752 acres when the company is in the business of harvesting timber.
"Is that why they leave 10 trees standing every once in a while?" he asked.
The tax savings are most striking at Smith Mountain Lake, where undeveloped waterfront land is commoly assessed at $15,000 to $20,000 per acre.
One 89-acre waterfront tract valued at slightly more than $1 million is assessed at only $12,127 for tax purposes - which translates into an annual savings of nearly $5,000 for the owner, county records show.
Some 115,000 acres of timber land are enrolled in the land-use program. Pinckard has no estimate on how much the tax breaks cost in terms of lost revenue.
The Board of Supervisors approved a $25,282 budget for the land-use office, but took no other action.
by CNB