Jan. 15, 2009

Hinkle, Warnick proposal extends property tax break to horse boarders
'The last thing in the world we should be doing in these stressful economic times is placing another fee or tax on struggling small businesses,' says Hinkle

Property owners across the state fearing they might be on the hook for current and back property taxes due to unclear language in the state's Current Use Program can rest easy if legislation proposed by Reps. Bill Hinkle and Judy Warnick becomes law.

"Our bill expands the definition of 'commercial agricultural purpose' to include horse boarding and other, more modern agribusiness uses such as piglet and calf breeding," said Hinkle, R-Cle Elum.  "Our agriculture industry - and the businesses that support that industry - are constantly growing and changing.  Our laws need to keep pace to reflect these changes.

"The last thing in the world we should be doing in these stressful economic times is placing another fee or tax on struggling small businesses," Hinkle continued.  "If our laws are antiquated, we need to fix them."

The property tax relief is part of the state's open space program, designed to encourage property owners to leave land underdeveloped.  While commercial farming sees the highest tax relief, there are various reductions depending on the specific use of the land.

"As a horse boarder myself, I can’t imagine the 'back taxes' I and others would have to pay to keep our businesses going," said Warnick, R-Moses Lake.  "The law was intended to encourage the open space of land.  Horses need space like any other farm animal, whether they’re being raised or boarded for the winter.  I look forward to correcting this law."

Recently, the Department of Revenue (DOR) became aware some agribusinesses that might not meet the current use standards were claiming the property tax break.  As a result, the department is in the middle of a rule-changing process to address the expanding definition of commercial agricultural purpose and is not currently collecting taxes from those businesses in question.

Hinkle said he was grateful for the DOR's recent decision not to enforce the collection of the fees, but feared if no legislative action was taken, many property owners would eventually be forced to pay current and back taxes.

"We're thankful the department was willing to sit down and work this out on behalf of our expanding agribusinesses," Hinkle said.  "But we need a more permanent, more clearly-defined solution than what they're capable of coming up with.  And we specifically need to protect our small businesses from having to pay huge amounts of back taxes due to no fault of their own."

House Bill 1232 defines commercial agricultural purpose to include:

"...the commercial: Raising; harvesting; feeding; breeding; managing; selling; care; or training of a farm product as defined in RCW 7.48.310(4) where the owner or lessee intends to obtain through lawful means, a monetary profit from cash income.  No state agency, county , or municipality may impose definitions more restrictive than those defined under this section."

Hinkle and Warnick's bill was referred to the House Agriculture and Natural Resource Committee.

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