Page 22 - Georgia Forestry - Summer 2018

Taxation with Proper Valuation
New Timber Tax Reform Legislation Heads to November General Election Ballot
Story by Matt Hestad
Retired from a 37-year corporate man- agement career, Mac Peden knows what it takes for an investment to be profitable and he understands the burden that property tax can be
to the long-term viability of owning forestland. Thanks to the recent passage of House Resolution 51, a constitutional amendment, and House Bill 85, its enabling legislation, much-needed uniformity and equity will be delivered to landowners across the state in terms of property taxation.
Peden lives in Atlanta with his wife Susanne. His sons, Michael and Benjamin, also live in the metro region with their families. Any weekend he can go, Peden travels to his second home in Hancock County, a cabin nestled in a 2,500-acre tree farm he has acquired over the past 25 years. His family has farmed the land since it was acquired by an original land grant in 1784.
Since inheriting a small portion of the land from his father in 1993, Peden has taken an active role in managing and acquiring land as an investment. In addition to timber harvests, he has hunting leases spread out across the property to offset the property’s annual tax bill. Thankfully, hunting leases in the
region are competitive enough to be profitable for landowners like Peden. Additionally, to lower the overall tax burden on the land, he has enrolled the entirety in a covenant through the state’s Conser- vation Use Value Assessment (CUVA) program.
“In order for forest land to remain profitable, the tax system must take into account the long- term investment nature of owning and actively managing timberland,” Peden said. “If it weren’t for the hunt leases and CUVA, I’m not sure that we would be able to continue acquiring and manag- ing forestland like we do currently.”
Passed as a constitutional amendment in 1991, CUVA allows non-industrial private landowners with 10-2,000 acres of agricultural land, timber land or environmentally sensitive land to enter a 10-year conservation covenant. Land enrolled in the program is taxed on 40 percent of the current use value.
Seventeen years later, the Forest Land Pro- tection Act (FLPA) was passed as an expansion of CUVA. The legislation, which has no acreage cap, allows both non-industrial property owners and corporations to put their property into a cov- enant for at least 15 years and to receive a lower tax burden for as long as the land is kept in forestry.
Today, land enrolled in CUVA and FLPA makes up nearly 80 percent of the 18.4 million acres of forestland on local property tax rolls in Georgia. According to Steve McWilliams, former Georgia Forestry Association president and veteran of several campaigns to improve and simplify taxa- tion of privately owned timberland, increasingly more favorable property tax policy for forestland is one reason that Georgia has more timberland than it did 50 years ago.
20 | GEORGIA FORESTRY