Mississippi

Property Classification:

For property tax purposes Mississippi classifies property into five different categories. Forest land falls under the category of agricultural use, class II property.

Classification	Tax Rate
Class I - consists of single family, owner occupied residential property;	10%
Class II - encompasses all real property other than that included in Class I or Class IV;	15%
Class III - is personal property other than motor vehicles and personal property included in Class IV;	15%
Class IV - includes public utility property owned or used by public service corporations, excluding railroad and airline property and motor vehicles;	30%
Class V - consists of motor vehicles.	30%

Agricultural use - Land is deemed to be used for agricultural purposes when it is devoted to the commercial production of crops and other products of the soil, including fruits, timber, livestock, and poultry.

Valuation and Assessment:

Agricultural land, like other locally assessed real property, is assessed for property tax purposes at a specified percentage of its true value, according to current use (Miss. Code Ann. § 27-35-50). Forest land is assessed at 15% (Class II property).

An appraisal of land used for agricultural purposes must take into account soil types, productivity, and other criteria set forth in the land appraisal manuals of the Mississippi Department of Revenue. The income approach to valuation must be used, with a capitalization rate of not less than 10% and a moving average of not more than 10 years*.

*For appraisal purposes, currently net returns to land in the capitalization formula uses a 3-year moving average (No.1350 Spurlock, Munn, and Henderson Dec. 2008)

The determination of net annual income for forestland is based on the value of the average annual growth and harvest per acre minus associated costs of ownership and management. The net annual income is capitalized at the 10 percent rate established by the Mississippi Legislature.

Forestland Use Value = Net Revenues / Capitalization Rate (10%)

Net Revenues = Average Revenues - Average Costs

Timber Revenues = Current Annual Increment x Composite Product Price

Costs Include: carrying costs, management costs, ad valorem taxes, severance taxes

Forestland: All land that is currently in forestland use and land that is physically non-productive will be included in this group. Forestland use requires stocking by forest trees of any size and species, currently or within the past three years. All soils in the county will be assigned to forest site classes A, B, C, D or E, and each class will be valued separately. Only nonproductive land exceeding 10 contiguous acres in size contained in parcels qualifying for agricultural use will be assigned a minimum value as forest site class E.

The productivity of cropland and forestland depends upon the natural inherent capability of the soil and the degree of management exercised by the producer. Since land is the element subjected to ad valorem taxation, and not management, land productivity should be measured under an average or typical level of management coupled with standardized farming and forestry practices prevalent in the area.

Estimates of forest productivity are derived from data reported by the Forest Survey, United States Forest Service and the Severance Tax Records of the Mississippi Department of Revenue. Forestland use values are estimated based on current levels of timber stocking as reported in forest survey reports by the U.S. Forest Service.

Mississippi Department of Revenue publishes an annual schedule of "use values" based on the net income of an acre of land capitalized at 10%. For "forestland" Mississippi uses 5 soil productivity classes to determine use values.

Site Class

A	Forest lands capable of producing 120 or more cubic feet of wood per year.
B	Forest land capable of producing 80, but less than 120 cubic feet per year.
C	Forest land capable of producing 50, but less than 80 cubic feet per year.
D	Forest land capable of producing less than 50 cubic feet per year.
E	Non-productive land

The assessed value is equal to the capitalized value, which is published by the tax commission, times the state assessment rate of 15% (Class II property). The assessed value is then multiplied by local millage rates to determine total tax liability.

Until June 30, 2002, each county is required to levy a forest acreage tax of 9¢ per acre on all timbered and uncultivatable lands (Miss. Code Ann. § 49-19-115). This is in addition to the normal property tax described above.

Uncultivatable lands shall not include bogs, un-reclaimed strip mine areas, coastal beach sands, tidal and freshwater marshes, beaver ponds and flood or flowage easements.

The provisions of this section and the tax levy required herein shall not be applicable to any counties which were not levying such forest acreage tax on January 1, 1989.

Exemption from ad valorem taxes - All growing, standing timber, trees and shrubs in the State of Mississippi, or any county, municipality, levee district, or other taxing district therein, is exempt from all ad valorem taxes. And shall be exempt from ad valorem taxes after severance so long as such timber, trees, or shrubs remain in the log state, or unmanufactured condition and so long as the title remains in any person other than the manufacturer or processor. (Miss. Code Ann. § 27-25-27)

Mississippi levies a privilege tax upon each person engaged or continuing within the state in the business of growing, felling, cutting, severing and producing logs or any timber products from the soil or water, for sale, profit or commercial use; or purchasing, logging, or selling logs or timber products for commercial purposes. The tax is assessed as follows:

(a) For timber, all species used in the manufacture of lumber, veneer chips or other products:

(i) One dollar ($1.00) per thousand board feet, or Twelve Cents (.12) per ton, for pine and other soft woods;

(ii) Seventy-five Cents (.75) per thousand board feet or Eight Cents (.08) per ton, for hardwoods;

(b) For lumber, all species and kinds, including crossties: Seventy-five Cents (.75) per thousand board feet actual board measure;

(c) For poles, piling, posts, stanchions and like timber products not manufactured into lumber: Three Dollars and Sixty Cents ($3.60) per one hundred (100) cubic feet;

(d) For timber products purchased by the cubic feet other than those listed in paragraph (c):

(i) Fifty-five Cents (.55) per one hundred (100) cubic feet for pine and other soft woods;

(ii) Forty-one Cents (.41) per one hundred (100) cubic feet for hardwoods;

(e) For pulpwood, all species and kinds except pine: Twenty-two and One-half Cents (.22 1/2) per cord of one hundred twenty-eight (128) cubic feet;

(f) For pine pulpwood: Thirty Cents (.30) per cord of one hundred twenty-eight (128) cubic feet;

(g) For stumpwood, lightwood or other distillate wood: Twenty-five Cents (.25) per ton of two thousand (2,000) pounds;

(h) For turpentine crude gum: Thirty Cents (.30) per barrel of four hundred (400) pounds;

(i) For all other timber products not hereinabove specified: Seventy-five Cents ($.75) per thousand board feet or Thirty-seven and One-half Cents (.37 1/2) per cord of one hundred twenty-eight (128) cubic feet.

If the tax has been paid by the producer, grower, or vendor, then the purchaser shall report the purchases to the commissioner. This report shall be filed monthly by purchasers and shall give the following information: name and address of producer, grower, or vendor, timber severance tax permit number, quantity purchased and quantity from each county in which timber products were severed. If tax has not been paid by producer, grower, or vendor, the tax shall be the liability of the purchaser and shall be paid by him.

Spurlock, S., I.A. Munn, and J.E. Henderson. 2008. Procedures used to calculate property taxes for agricultural land in Mississippi. MAFES No. 1350.

Mississippi Department of Revenue. Mississippi appraisal manual.