The forest property tax situation in Virginia

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Virginia Tech

The principle objective of this study was to determine whether the Virginia property tax, as it is applied to forest lands, may have harmful effects on forest management in Virginia. In order to accomplish this objective, an investigation was made of the theoretical aspects of the general property tax as applied to forest land, including a definition of tax equity as applied to forest taxation, Next, the property tax situation in Virginia, specifically as related to forest lands, was investigated.

The usual situation of the general property tax as applied to forest lands was found to produce two serious equity faults, deferred yield bias and parcel bias, which could be harmful to forest management. It was also inferred that the general property tax is a variable cost as applied to forestry, and as such, influences management decisions.

When the Virginia property tax situation was compared to the general case, it was found that the situations were not substantially different. Alternatives to the general property tax on forest land were discussed, It was decided that only the productivity tax meets the defined standard of equity.

It was concluded that the forest tax situation in Virginia will allow the faults which are found in the general property tax situation to occur in Virginia. The effects of the presence of these faults in the Virginia situation and the magnitude of these effects were two subjects which were left for future study. It was felt that a firm understanding of the nature of these faults in the general property tax was prerequisite for further studies. Thus, in order to determine the actual effects of the Virginia real estate tax on forest management decisions future intensive study is necessary.