April - June, 2011
Sawmills Reclassified Agricultural Property
Great News! Governor Nixon signed SB 55 into law. SB 55 changes the classification of sawmills and planing mills for SIC Code 2421 from commercial to agricultural and horticultural property for property tax purposes. This will reduce the property tax assessment rate from 32% to 12% for primary processing mills of raw logs.
The deadline to sign bills passed during the 2011 Legislative Session expired at midnight on Thursday, July 14, so SB 55 was one of the last bills to be signed by Governor Nixon into law. "I was getting a bit nervous," says MFPA Executive Director Steve Jarvis, "but I always believed that the Governor would do the right thing and sign SB 55."
According to Missouri's Committee on Legislative Research - Oversight Division, SB 55 will become effective in August 2011 and cost savings will begin with assessments for 2012 property taxes due in December 2012 (FY 2013), resulting in an annual cost savings to the forest products industry of over 4 million dollars!
"This will be a much needed financial boost to an industry that is struggling to survive," says MFPA President Tony Parks, "due to the ongoing downturn in the economy, particularly the housing sector." U.S. Housing starts are only one-sixth of the market peak of 2007. According to the Missouri Department of Revenue, profits for the forest products industry have dropped 60% from 2008 to 2010.
"Many folks deserve credit for the passage of SB 55," says Steve Jarvis." For three years, similar bills were introduced, but failed to pass. Finally this year SB 55, introduced by Senator Dan Brown, was passed with only one "No" vote in the Senate and all but 24 votes in the House. "Special thanks to Senators Dan Brown and Rob Mayer, Representatives David Day, Paul Fitzwater, Tim Jones and Steven Tilley, and former Representative J.C. Kuessner for their hard work over the years," Jarvis added.
From the initial idea three years ago by MFPA member Connie Rehagen, Rustic Wood Products, to the members of the MFP-PAC, MFPA Board and Governmental & Public Affairs Committees, MFPA Members also deserve much credit as do MFPA's Lobbyists, Nancy Giddens and Shannon Cooper, who professionally guided us along the path to victory.
Information on how to apply for a reduction in property tax assessments for sawmills and planing mills will be provided to MFPA Members as soon as it's available.