HCS HB 1207 -- CLASSIFICATION OF SAWMILLS

SPONSOR:  Wilson, 119 (Day)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Rural
Community Development by a vote of 12 to 0.

This substitute specifies that for property taxation purposes
agricultural and horticultural property will include sawmills and
planing mills that alter logs from their original form and which
are defined in the United States Department of Labor's Standard
Industrial Classification Manual.  Currently, these mills are
classified as commercial property.

FISCAL NOTE:  No impact on General Revenue Fund in FY 2011, FY
2012, and FY 2013.  Estimated effect on Other State Funds of an
income of $0 in FY 2011, a cost of $0 to $20,143 in FY 2012, and
a cost of $0 to $20,143 in FY 2013.

PROPONENTS:  Supporters say that the bill will reduce the tax
rate for these mills from 32% to 12%, providing tax relief that
this industry desperately needs.  The federal government
considers timber to be an agricultural product, so treating
sawmills as agricultural property makes sense.  Sawmills and
planing mills harvest trees like any other crop by taking a log
and turning it into a plank of wood.  They do not take a plank of
wood and build something.  The downturn in home and commercial
construction has severely impacted Missouri's sawmill industry.
A sawmill is often the largest employer for the rural area in
which it is located, and many are family-owned businesses
operating on a shoestring budget.

Testifying for the bill were Representatives Day and Kuessner;
and Missouri Forest Products.

OPPONENTS:  Those who oppose the bill say that the
reclassification of sawmills to a lower tax rate will have a
significant, negative affect on school districts which rely on
property tax revenue to operate.  Reducing the rate will mean
less revenue for local governments.  If sawmills are allowed to
function as agricultural property, other facilities that use
agricultural commodities in their products will want the same
benefit which will be catastrophic for local revenues.

Testifying against the bill was Schools Administrators Coalition.

OTHERS:  Others testifying on the bill say it only relates to the
sawmill itself, not the surrounding ground on which the trees are
located.

Testifying on the bill was Missouri Assessor's Association.

Missouri House of Representatives
95th General Assembly, 2nd Regular Session
Last Updated September 14, 2010 at 3:10 pm