Court rules against Hawley on forest tax
HAWLEY — The state’s highest court decided Thursday that the New England Forestry Foundation is entitled to a $172 “charitable” tax break from the town of Hawley for its 134-acre forest, on grounds that holding land in its natural condition, protecting wildlife habitats, filtering air and water supply and absorbing carbon emissions constitutes “charitable activities of a type that may benefit the general public.”
This ruling means that, although the Forestry Foundation does not actively promote its forest for public use — with signs, marked trails, etc. — the property is still regarded as providing public benefit.
The small property tax has been assessed and paid for several years. But, in 2009, the Forestry Foundation submitted a Charitable Tax Return to town assessors, for a Fiscal Year 2010 tax exemption for charitable purposes that included “the conservation and sound management of the region’s private and municipal forestlands.”
The foundation argued its charitable purposes included “protecting forest land throughout New England for the purposes of saving open space ... educating the public about the benefits of providing clean water, wildlife habitats, and recreational opportunities through forest-land conservation.”
The assessors denied the exemption in April 2010, on grounds that nothing was done to promote public land use; and in 2011 the Appellate Tax Board upheld the Hawley board’s decision.
The Supreme Judicial Court decision was handed down Thursday, saying “the promotion and achievement of public access is not required to demonstrate occupancy of the land in order to qualify for (the charitable) exemption.” However, the determination goes on to say that a charitable tax exemption would be harder to prove in cases where effort is made to exclude the public from using the land, either through physical barriers, “‘no trespassing’ signs, or active patrols of the area.”
“Obviously, we’re very disappointed,” said Special Counsel Rosemary Crowley. “Clearly the SJC was weighing and balancing demonstrated intent to support charitable use of land versus just protecting the land from development — property being ‘parked,’ tax-free, until the time is right to sell it.”
Crowley said placing Chapter 61 conservation restrictions on land means that, before the land can be sold for future development, it has to go through a process, in which the town has right of first refusal to buy it. She said, under this ruling, a charity is able to “simply acquire land and hold it tax free,” without going through Chapter 61. “They could hold the property without paying any taxes, until it’s a good time to develop.”
Crowley said it will be harder for assessors’ boards in the future to determine whether such land-holdings are true conservation properties or not.
When the case came before the Supreme Court in January, Robert Ellia, executive director for the Massachusetts Association of Assessing Offices, told The Recorder there were concerns that towns would go after nonprofits that truly qualify for tax-free charitable status if the decision in favor of Hawley’s assessors was upheld.
“If (the decision) goes the other way,” Ellia said, “I think you could end up with a lot of tax-exempt property that shouldn’t be.”
The Recorder was unable to reach any of the town’s assessors Thursday afternoon to comment in time for this story.
On its website, under the heading, “Is conservation really a charitable purpose?” the Forestry Foundation says:
“NEFF is a charitable organization chartered in Massachusetts and recognized by the IRS as a nonprofit organization eligible to receive tax deductible donations — a status and role we have had since ... 1944. Massachusetts General Law Chapter 58, section 5 (says) real estate is exempt from taxation when it is ‘owned by or held in trust for a charitable organization and occupied by it or its officers for the purposes for which it is organized. ...’ NEFF’s mission is to conserve forestland and demonstrate sustainable forestry practices. ... All our properties are community forests open to the public for many activities dawn to dusk.”
The website goes on to say that, since purchasing the Hawley land in 2000, the foundation has earned $35,712 in gross timber revenues — money which the organization has plowed back into its programs and missions.
Out of Hawley’s total land mass of 19,740 acres, 8,700 acres are state-owned forest land (44 percent); another 2,700 acres (13 percent) are classified as forest land and receive a reduced tax rate under Chapter 61.