Big Landowners Able To Ax Tax Bills Wealthy Waterfront Holders Enjoy Exemption Designed For Timber Industry
The people who own some of the biggest stretches of waterfront also get the biggest tax breaks.
Kootenai County’s top waterfront owners qualify for timber exemptions that reduce their property’s taxable value to a fraction of what it’s worth. The exemptions are designed to help the timber industry.
Property owners who don’t get such exemptions bear the brunt of high taxes to pay for schools, county government and other services.
Harry Magnuson’s 5-1/2 miles of waterfront is worth more than $17 million. But its taxable value after timber exemptions is $4.4 million, giving him a tax bill of $29,559 for 1996.
Buell Brothers Inc., which owns 9,020 frontage feet on Lake Coeur d’Alene, also enjoys a big timber tax break even as the company prepares 104 acres for development.
Jean Maucieri, Wayne and William Hohman, Inland Empire Paper Co. and other top waterfront owners benefit from timber tax cuts, too.
The exception is Duane Hagadone of Hagadone Hospitality, who owns 6,418 frontage feet - just over a mile of waterfront. The resort owner and his business have paid the county $187,410 in waterfront property taxes this year.
Some people could never afford to hang onto their property if it weren’t for the timber exemption.
The 1982 timber tax law has strong support. It was written to encourage growing and harvesting of timber, and most of the top landowners have logged their property in recent years.
“As long as the forest landowners have met the criteria that they are managing the timber as a crop, they’re entitled to it,” said Joan Kerttu, past executive director of the Idaho Forest Owners Association.
Real estate agent Larry Runkle believes the tax exemption has been abused by people who are holding land as an investment. Those people should have to pay a retroactive tax on the market value of the land when it sells, he said.
“It’s not fair to the schoolchildren to sit there with the timber exemption, hold the property and then when they sell, they don’t have to pay,” Runkle said. “It’s like asking, ‘I want to drive a Rolls Royce, but you get to pay for it.”’
Norma Dobler of Moscow, a former legislator who later served on the state Board of Tax Appeals, also questions some exemptions.
“In some cases, it was very obvious that the owners of the timber property had no intention of ever harvesting it,” Dobler said.
Ron Craig, a tax expert with the state Tax Commission in Coeur d’Alene, said it’s easy to qualify for a timber exemption. A landowner just has to have a timber management plan, which can be as simple or complex as the landowner wants. A timber exemption can apply to a parcel that has a home on it, provided the parcel is more than five acres.
Sometimes property owners who enjoy hefty timber exemptions don’t even pay the reduced taxes on time.
Magnuson and his Coeur d’Alene Land Co. are delinquent on seven of 21 waterfront parcels in Kootenai County. The Buell Brothers are delinquent on all of their waterfront property taxes in Kootenai County.
“I’m not too crazy about paying taxes because of the way they spend the money,” said Robert Buell. “When it comes time we have to pay them, we pay them.”
, DataTimes ILLUSTRATION: Graphic: Who owns the most waterfront property