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Treed acres are still worth a hefty tax break

Renate Kraemer, a volunteer at The Enso House, walks through a portion of the 7.2 acres of trees land designated as open timber by Island County Monday. - Stephen Mercer
Renate Kraemer, a volunteer at The Enso House, walks through a portion of the 7.2 acres of trees land designated as open timber by Island County Monday.
— image credit: Stephen Mercer

Provided that the purchase price is not an issue, it’s cheap to own open land in Island County.

Under the state’s 1970 Open Space Taxation Act, open space, farm and agricultural land, and timber land in the county and around the state is taxed at a rate that can save landowners thousands of dollars per acre. Intended for land open for timber cutting, farming and enjoyment of natural resources and scenic beauty, the act is one big reason Whidbey Island does not have the level of commercial and residential development communities a ferry ride away do.

“[It’s] incentive to keep property... more rural and provide more viable forestry,” said Jeff Tate, Island County’s assistant director of planning.

Even as large-scale forestry has waned as an industry on the island, lower open space taxation — which can mean the difference between a $10,000-per-acre, per year tax bill and one that runs just over $100 — the act is keeping smaller pieces of forest in trees and producing everything from building materials to firewood. Under the open timber or designated forest program, the landowner pays a “current use land value” tax rate of $100 to $110 per acre in taxes.

One landowner who most recently took advantage of the open space tax break is David Trowbridge. Trowbridge, the founder of non-profit Tinyblue Foundation, received approval Monday to classify more than 7 acres of the foundation’s land along Wahl Road in Freeland as open timber. Most of the 20-acre property has been set aside for The Enso House, which provides comfort care for people suffering with a terminal illness.

Trowbridge said he decided to preserve the forest after taking a forest stewardship course through the Washington State University Extension Program. He wrote a forest management plan upon completing the program, a plan that calls for harvesting mature red alder and replacing the trees with conifers and native underbrush. Lower taxes are just a side benefit.

“I wanted to learn as much as I could to maintain and improve the health of the forest,” Trowbridge said.

Like other landowners who want tax relief for their open, timber or farm land, Trowbridge had to submit his management plan to Island County. After review by the county planning and assessor’s office, his request to put his land in the special property tax program was approved by the Board of Island County Commissioners.

Landowners who violate the open space agreement must to pay the taxes they would have paid had they not had it reclassified for tax purposes multiplied by the levy rate at the time of removal and the number of years in the program.

Jan Graham, the current use administrator for the Island County Assessor’s Office, said many landowners with land in the tax program are electing to pull it out early, regardless of the fees. Because of Whidbey Island’s growing demand for property, land owners who own 20 or more acres of land can divide their property into smaller lots and sell them for a profit in excess of owed back taxes. She said the new owner and the previous owner must also decide if the land stays in the program. If the land buyer stays in the program, they pay the low rate, but can not develop in the forested land.

A strong housing market on Whidbey Island is to blame in the shift, Graham said. Many property owners enrolled in the program for decades now have incentive to leave the program and to sell property at a profit.

Why try open space?

The open space program is split into two classifications with nearly identical tax benefits.

Landowners with at least 5 acres of commercial timber land can receive an “open timber” designation, through approval from the county board of commissioners, said Jeff Tate. Landowners owning a minimum of 20 contiguous acres of commercial timber land may try for a “designated forest” classification with the county’s assessors office.

Landowners enter the tax program for several reasons, said Jan Graham. In many cases, they may want to sell the timber commercially. To qualify for the tax break after cutting timber on acreage, a landowner must replant and keep the land clear of blackberry and other intrusive plants.

In other cases, landowners may just want to clear underbrush or thin the trees to improve the health of the existing trees.

“A lot of people are using the program to preserve the land,” Graham said.

As of this year, 340 parcels in Island County are classified as open timber, while 549 parcels are designated forest land.

The responsibility for paying the taxes Island County needs shifts to other property owners, who must pay additional taxes to compensate for the lost revenue, Graham said. Because of the cost-shifting, the county weighs applications carefully before approving any new tax classifications. Most applications take at least a year before final approval.

Landowners must then follow the forest management plans written before they entered the program. Forest plans are often written by foresters or arborists, although landowners occasionally write their own plans.

The plans lists the owner’s objectives, how the property owner prepares for fire safety, the natural resources on the property and other detailed descriptions of the property, said Elliott Menashe, an environmental consultant with Greenbelt Consulting.

To keep track of the property owner’s compliance with the plan, a county employee surveys to the property and reviews the plan, said John Coleman, an assistant planner for the county. the county tracks logging permits, as well, Graham said.

Jeff Tate said the planning department has noticed a trend in selling off forest land in the tax program. Some landowners shift their land from “designated forest” to “open timber,” subdivide it, then sell it off in pieces.

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