Timber tax

What this would do: Tax proposals are complicated, and this one is no exception. The amendment has several missions. One is to lower the tax burden on timberland owners.

To understand what the bill does, you need to know a little history. Large timberland owners have been receiving tax breaks since the state constitution was amended in 2008, creating the Forest Land Protection Act. For almost a decade, the state has been sending millions of dollars to local school boards and county governments to make up a majority (97 percent) of what they are not collecting in taxes from these property owners. (Note: Qualifying for the 2008 tax break are owners of 200-plus acres of timberland who agreed to place a restrictive covenant on their property for 15 years. (With the 2018 amendment, that would change from 15 years to 10 years). Through the years, these properties have been assessed as forestland, not on the fair market value. The proposal would allow local governments to be reimbursed at rates closer to a property’s current values. Some local governments came out winners underthat 2008 methodology, and some were losers. Under the proposed amendment and the new formula, that could flip — with those government winners becoming losers.

Another provision of the proposal creates a class of qualifying commercial timberland that also would be eligible for tax breaks. The amendment shifts responsibility for assessing these properties from the local tax assessor’s offices to the state Department of Revenue.

Andres Villegas, the president and CEO of the Georgia Forestry Association, said a University of Georgia study shows that the state’s working forest is taxed three times higher than in neighboring states, with 4.7 million acres taxed at rates about six times higher.

“That puts those 4.7 million acres at risk of being converted to strip malls and neighborhoods,” Villegas said. “When you make that conversion, it’s permanent, and you permanently lose the air, the water, the wildlife benefits that come from the forest, as well as the ability to produce timber for the $35 billion industry that’s converting it to things we use every day.”

■ Owners of 50-plus acres who take advantage of the proposed amendment’s new “timberland property” classification and would not be required to have any restrictive covenants on their property.

Their taxeswould be expected to go down, but not as much as FLPA properties.

Villegas said, for that reason, he expects most landowners will attempt, if possible, to take advantage of the FLPA.

■ Worth noting: The proposed amendment makesno provisions for the state to reimburse school boards and county governments that lose revenue due to landowners taking advantage of the new land classification.