Current Use Tax Should Remain

A recent note by House Speaker Chandler explains Current Use and its advantage for NH.  This makes sense to me.  Please read more…

“Speaker Gene Chandler: Why We Should Keep Current Use As It Is
Our predecessors recognized the importance of our farms and forests and the impact property taxation can have on a landowner’s ability to retain and manage their fields and woodlands. To this end, in 1968 they modified the New Hampshire Constitution to allow land to be taxed at its “current use.” What this means is the land will be taxed annually on its ability to grow trees and crops as opposed to its ability to grow houses or strip malls. But when the farmer or forest owner decides to subdivide their land or develop their fields and forest, they then pay an additional land use change tax.

What this law has enabled our state’s farmers and forestland owners to do is retain their lands as fields and forests while the rest of us benefit from this open space. This also helps keep municipal property taxes in these rural communities down.
How does this keep municipal property tax down? Farmland and forestland do not require much in the way of police or fire protection, nor do these lands send any children to school. Studies conducted by municipalities and universities comparing tax revenue generation to municipal costs consistently show that on a dollar-for-dollar basis, communities raise more tax revenue from lands assessed under current use than they spend in municipal services for those acreages.
For current use detractors in the NH Business Review article to say consideration for the cost of municipal services is “irrelevant” misses a principal purpose of the current use law. Indeed, in the law’s declaration of public interest it is stated: Open space land imposes few if any costs on local government and is therefore an economic benefit to its citizens.  Moreover, by far the vast majority of property in current use in New Hampshire is owned by local people and families.


A University of New Hampshire study conducted in the mid-1990s found that individuals and families owned 95 percent of property in current use, and more than 50 percent of these people had annual incomes of $50,000 or less. And nearly 90 percent of current use property is owned by New Hampshire residents.
These property-owning residents — your neighbors, friends, and colleagues — are generous with the access they give to their lands. That same UNH study found that less than 15 percent of property in current use in New Hampshire is posted “no trespassing.” More recent data, from 2016 compiled by the NH Department of Revenue Administration, shows that at least half of current use land receives a discount for recreational use.
Although the article focuses on a single selectman’s opinion and his interpretation of the New Hampshire Constitution, I believe our predecessors got it right. Current use taxation is important enough to the state economy and our quality of life that it needs to be in the Constitution. It is constitutionally sound.


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