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Plant a tree, harvest a big break at tax time

By GREG HAMILTON

© St. Petersburg Times, published March 11, 2001


Feel that stranger's hand in your pocket? That can only mean one thing: It's tax time again.

As the clock ticks down to the dreaded deadline of April 15, Americans are gathering the paperwork they need to make the IRS happy enough to keep their audit dogs on a leash.

But that's only one part of the government machinery that is grinding away. As you know, the sharpies in Washington are busy figuring out ways to give more money to the super-rich, even as hundreds of millionaires tell the president they don't want the bonus money.

Like a mudslide, that shifting tax burden is flowing downhill, through the state houses and right to your front door.

That same tax two-step is occurring in Tallahassee, where leaders are devising new ways to shift responsibilities and costs to local governments.

It's being sold as a move toward local control, which many people like, but it just means dumping more of the costs for services on the hometown officials, who will face the political heat if they have to raise taxes.

In the coming months, local boards will propose budgets that try to maintain or enhance services while keeping taxes in check. This annual magic trick is being made even harder as Washington and Tallahassee pass along more of their responsibilities to the locals.

The halls of government are not the only places where people are finding new ways to get out from under their tax obligations, however. While individual taxpayers comb the IRS documents and the Internet sites for deductions, businesses are rooting around for ways to weaken the bite.

The developers of Citrus Hills seem to have found a clever one.

Late last year, they began planting slash pine seedlings in more than 150 acres of open land in the sprawling, central Citrus development. They finished sowing about 108,000 trees by Dec. 27. Was it mere coincidence that they had to complete the job by Jan. 1 in order to qualify for a tax break?

And what a savings! If, as expected, the county Property Appraiser's Office gives Citrus Hills an agricultural classification on the newly treed properties, the taxable value drops from $2.25-million to $850,000. That translates into a savings of $25,000 in property taxes every year, or at least until the trees are bulldozed to make room for houses.

This isn't the first time a large landowner has tried to get an agricultural exemption on property that is waiting for development. Several years ago, the Property Appraiser's Office tangled in court with the developers of Sugarmill Woods, who claimed the cows they let roam on their vacant land made them eligible for an agricultural exemption (and a whopping tax break). After a costly battle that climbed all the way to the Florida Supreme Court, the developers ultimately lost their exemption.

The Property Appraiser's Office, however, expects that Citrus Hills will meet the criteria for a bona fide agricultural operation -- and the tax relief.

Now, I applaud anyone who plants a tree rather than cutting one down, but I have to wonder about a developer who has owned vast tracts of open land for decades and who only now decides to get into the tree-planting business.

It's a win-win situation for them. If they sell the property, they will knock down the saplings for a house that will make them buckets of money. If the property doesn't sell for years, the trees grow and eventually will be cut and sold -- more money. All the while, they get a sweet tax break.

I know what you're thinking. You have some trees on your property; can you tell the county you're growing them to be harvested some day and claim a hefty tax exemption?

'Fraid not. Although the Property Appraiser has granted agricultural exemptions on tracts as small as five acres, there are more hoops than that to jump through to qualify. It appears only the big dogs get to gnaw on this tasty bone.

But don't fret, there is a role for you in this nifty game.

When the developer gets the tax break, and the county loses about $25,000 a year in revenue, whom do you think will be called upon to make up the difference?

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