Real estate investor Michael Lightman hopes to cash in on a lush woods located in the midst of top-dollar real estate development in east Shelby County, and taxpayers are subsidizing his gambit.Lightman bought the 27-acre stand of long-needle pine, oak and maple in 1998 as FedEx opened its colossal technology campus, the FedEx World Tech Center, just across Bailey Station Road in Collierville, Tenn. He's attempting to sell the property for $7 million and more than double his investment. Yet Lightman paid just $347 in county property taxes on the land last year — less than the bill on a $35,000 home — after Shelby County Assessor of Property Cheynne Johnson enrolled it in a widely exploited, poorly regulated state farmland protection program.
According to county records, Lightman receives a $53,000-a-year property tax discount on the tract, though it's advertised for sale as a prime development site for a hotel or office building. "Taxes will eat you alive on a property like that," he said. "You've got to try to find some help." A joint investigation by the News Sentinel and its sister E.W. Scripps newspaper in Memphis, The Commercial Appeal, found that Lightman and many other savvy property owners across Tennessee are reaping dramatic tax savings — often paying pennies on the dollar — because a 1976 law to prevent farmers from being taxed off their land is full of loopholes and timidly enforced by many of the state's 95 assessors.
Nationally, preferential tax laws benefiting farming are abused by businessmen holding land for development despite scant evidence the programs actually prevent development, said Richard W. England, a professor of economics and natural resources at the University of New Hampshire. "The original argument going back to the 1950s was to save the family farmer. And obviously that hasn't worked," said England, who questions the effectiveness of such laws in an April article of the Lincoln Institute of Land Policy's Land Lines magazine.
[Read More...]