Hawaii

Property Classification:

Property taxes in Hawaii are administered by the counties. Effective 7-1-2016 Haw. Rev. Stat. § 246 has been repealed. Each county has adopted specific ordinances

Hawaii County

Native Forest Dedication

Eligibility: "Native forests" means lands which have sixty percent or greater native species forest cover. (1) Native species are defined as those species indigenous to the Hawaiian islands. Indigenous in this context shall mean plants that became established or evolved in the Hawaiian islands without the aid of human beings. (2) The forest cover requirement may be met by native species in either the tree layer or the understory layer, or a combination of the two; provided a minimum twenty-five percent of the forest cover shall contain tree cover.

Dedication Process: An owner who desires to dedicate the land for native forest preservation for a period of twenty years shall petition the director of finance and demonstrate in the petition that the land qualifies as native forest as provided herein. Any property three acres or larger within agricultural, residential and agricultural, family agricultural, intensive agricultural, and agricultural project districts, or open zoned districts, which is covered with at least 2.75 intact and contiguous acres of native forest is eligible for dedication as native forest property if it meets the classification requirements of native forest. The petition shall be filed with the director of finance by September 1 of any calendar year and shall be approved or disapproved by December 15. If approved, the dedication shall be effective on July 1 of the following tax year.

The director of finance shall determine whether or not land qualifies as native forest by using current natural resource or vegetation maps or other acceptable evidence. Other acceptable evidence includes, but is not limited to:

(i) A written affidavit by a recognized professional in the field of natural resources, or

(ii) A finding by a County, State or Federal agency or department with the relevant expertise in the field of natural resources.

If the director's findings are favorable, the petition shall be approved and the land shall be declared dedicated.

Native Forest Dedication Value: Dedicated native forest land shall be assessed at a preferential per-acre value in its restricted preservation use. In determining the value of lands which are classified native forest, the director shall assign the value of the lowest agricultural use category that the land could qualify for if it were to be put into agricultural use. No preferential value shall be granted to native forest land unless it is dedicated.

Breach of Dedication: The dedication shall be deemed breached and the tax assessment privilege cancelled retroactive to the date of the dedication, or the latest renewal period, and all differences in the amount of taxes that were paid and those that would have been due from assessment in the higher use shall be payable with a ten percent penalty and the native forest classification shall be rescinded.

Commercial Agricultural Use Dedication

Eligibility: "Commercial agricultural use dedication" means the use of land on a continuous and regular basis that demonstrates the owner is engaged in commercial agricultural activities from:

(1) Intensive agriculture;

(2) Orchards;

(3) Feed crops and fast rotation forestry; or

(4) Pasture and slow rotation forestry.

A special land reserve is established to enable the owner of any parcel of land, or lessee of a recorded agricultural lease with a minimum of five years remaining on the lease at time of petition, to dedicate the land for a specific commercial agricultural use dedication, and to have the land assessed its value in such use for a period of ten years.

Valuation: In determining the value of lands which are classified and used for commercial agriculture use, consideration shall be given to rent, productivity, nature of actual commercial agricultural use, the advantage or disadvantage of factors such as location, accessibility, transportation facilities, size, shape, topography, quality of soil, water privileges, availability of water and its cost, easements and appurtenances, and to the opinions of persons who may be considered to have special knowledge of land values.

Breach of Dedication: The deferred or rollback tax shall commence from the date the failure to observe the restriction, condition or provision, or the property's conveyance retroactive to the date the assessment was made pursuant to subsection (3)(F) of this section but for not more than ten years. The deferred or rollback tax shall be based on the difference between the assessed market value at highest and best use and the commercial agricultural use of the land at the rate applicable for the respective years. All differences in the amount of taxes that were paid and those that would have been due from assessment in the higher use shall be due and payable with a ten percent penalty.

Rollback tax schedule: (i) Breach of the restrictions on use within five years of the dedication shall result in a rollback to the date of the dedication. (ii) Breach of the restrictions on use within six years of the dedication shall result in a rollback of four years from the date of the breach. (iii) Breach of the restrictions on use within seven years of the dedication shall result in a rollback of three years from the date of the breach. (iv) Breach of the restrictions on use within eight or nine years of the dedication shall result in a rollback of two years from the date of the breach.

Kauai County

Tree Farm Development Exemption

"Tree farm development property" means real property suitable for the raising of a merchantable tree farm crop having a normal period of development from the initial time of planting to the first harvest of not less than six (6) years nor more than twenty-five (25) years and which contains a total cultivatable area of not less than ten (10) acres.

Eligibility & Application. The owner of “Tree farm development property” may apply to the Director of Finance for classification of the property as tree farm development property. No tree farm development shall be allowed in the urban district. If the tree farm development abuts the urban district then a buffer of one hundred fifty (150) feet shall be required in the tree farm property. This application must include the tree farm management plan for the tree farm, the planting and harvesting schedules, an estimate of value at harvest, and shall specify the tree crop or crops.

As part of the approval of the application, the owner shall agree in writing to the following terms and conditions relative to the establishment and management of the tree farm development property:

(1) The term of the agreement shall be for one (1) year beyond the normal period of development from the initial time of planting to the first harvest as determined by the Director's finding of fact;

(2) The owner shall plant and maintain the tree farm according to good tree farm management practices;

(3) The agreement shall be canceled and terminated and the property shall thereby be declassified and become subject to the conditions specified in Subsection (g) of this Section if, upon investigation, the Director determines that the owner of the tree farm development property is not complying with this Chapter or the agreement; and

(4) The agreement may also contain such other terms and conditions as set by the Director.

Exemption. Upon approval, tree farm development property, during the period of such classification, shall be exempt from real property taxes; provided that this exemption shall take effect for the tax year following the execution of the agreement and shall in any event terminate at the end of the tax year during which the agreement expires or one (1) year after the first harvest, whichever comes first.

The property or properties which are classified as tree farm development property in part or in entirety shall be assessed according to Section 5A-8.1. The exemption shall apply to the lands identified in the tree farm management plan, provided that the property or properties shall be subject to a minimum real property tax as provided in Section 5A-6.3(g). Properties classified as tree farm development property shall not be eligible for classification as tree farm development property again unless:

(1) The tree farm development is completed and followed by a twenty (20) year agricultural dedication under K.C.C. Section 5A-9.1; or

(2) The tree farm development is declassified under subsection (g) of this Section and all taxes, penalties and interest due to the County of Kaua'i as a result of such declassification have been paid to the County of Kaua'i.

Declassification. Upon declassification by the Director, for reason of failure on the part of the owner to comply with the terms and conditions contained in the agreement, of all or any portion of the tree farm development property, the Director shall notify the owner of the declassification. In such event, the Director:

(1) Shall cancel the exemption from property taxes on the property which has been declassified retroactive to the date that the property became exempt from real property taxes as provided by Subsection (e) of this Section, and the property taxes that would have become due and payable (but for the exemption) for all the years that the exemption was in effect on the declassified property shall become immediately due and payable together with a ten percent (10%) per annum penalty from the respective dates that those tax payments would otherwise have been due; and

(2) Shall thereafter assess the declassified property as provided in Section 5A-8.1.

Maui County

Administering Agency: Maui County

Purpose: Tree farms (not specifically addressed in Code, but could be considered "crop").

Size: There is no minimum lot size requirement, but the Maui County Code does set the minimum lot size for agricultural lots at 2 acres in the agriculture district.

Land Eligibility: Private property or lease; minimum 5 years acceptable previous agricultural land use.

Incentive: Tax assessment 50% of fair market value.

Time Frame: 20-year dedication; 10-year dedications might be allowed for short-rotation tree farms.

Other Requirements: Petition Director of Finance.

Honolulu County

Administering Agency: City and County of Honolulu

Purpose: Tree Farming.

Land Eligibility: Private Property or minimum 20-year lease; minimum 10 acres.

Incentive: Agricultural Property Tax Reduction (1-5% of fair market value, depending upon length of dedication).

Time Frame: 1-, 5- or 10-year dedications.

Other Requirements: Management plan.

The state of Hawaii does not have a severance or yield tax on timber or timber products.