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California franchise tax board
If the land use ever changes, the law imposes a "land use change tax" equal to 10% of the current market value. california franchise tax board Tax shelters. There is no statute of limitations or other time limit on this tax - it hangs over the property forever. This tax is secured by a lien, notice of which is recorded in the registry of deeds when the land goes into current use. Take as an example, a hypothetical 50 acre tract in Concord. california franchise tax board Nc tax forms. Current market values might be in the vicinity of $5,000 per acre, or $250,000 in total. Given the current tax rate of $27. 34 per thousand, the annual tax bill would be $6,835. california franchise tax board Tax liens. If the land were taxed under the current use system as farmland, in the mid-range at $200 per acre, then the tax bill would only be $273 - a significant savings. However, when taken out of current use, the owner at that time will have a $25,000 tax bill (or more, if the then-current market value has increased) that must be paid before clear title can be conveyed. Even if the current owner does not plan to develop the property, the $25,000 liability looming eternally over the property, (which will only increase over time) will undoubtedly reduce market values if the property is ever sold. Triggering the taxOnce in the current use box, there is no easy exit. Taxpayers cannot simply elect to take their land out of current use. Under RSA 79-A, the land use change tax is only triggered when:Actual construction begins on the site causing physical changes in the earth; Topsoil, gravel or minerals are excavated or dug from the site (with some exceptions); By reason of size, the site no longer conforms to criteria established by the Current Use Advisory Board. Issuance of final approvals by the planning board does not trigger the tax. Only the developer's actions in commencing work on a project will trigger the tax. Timing of the tax creates tension between the owner and the assessor. Often, the town wants the tax stretched out over time, to tax future increases in value resulting from betterments and the market success of a project. A developer often wants the tax paid immediately for just the opposite reason. Each project must be reviewed carefully to plan the events that will trigger the tax in a way that minimizes or delays the impact. Topography, frontage, lot sizes and the like will determine the best timing for payment of the land use change tax - either at once or in increments stretching the liability over time. Recent controversy over the land use change tax has focused on the impact of betterments. The issue here is whether the value of a road, utility system or other improvements in a project add value to the land for determining the land use change tax. Going back to our Concord example, if the developer installed a $100,000 sewer line to the property, would the valuation be increased to $350,000?Prior to February of 2001, the rules of the Current Use Advisory Board specifically excluded betterments in calculating value.
California franchise tax board
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