COLUMBIA,
S.C. (AP) - The sprawling Coastal Grand Myrtle Beach mall,
which currently has 1 million square feet of retail space,
certainly can't be confused with farmland.
But it was just two years ago that the land where the $200
million mall sits fell under the state's agricultural tax
exemption, said Horry County Tax Assessor Rendel Mincey.
The property, which is owned by Myrtle Beach developer
Burroughs & Chapin, qualified for the tax break from at
least 1987 until 2002, Mincey said.
The company paid $380.97 a year in taxes on the land when
it was still classified as timberland. When it was developed,
the company paid $529,982.12 in rollback taxes to the county,
Mincey said. That means a savings of more than $100,000 a year
for at least 10 years.
Burroughs & Chapin is developing the mall with CBL
& Associates. It opened last month. When it goes on the
tax rolls Jan. 1, 2005, the county will receive significantly
more from taxes than a few hundred dollars, Mincey said.
Developers can use a law in South Carolina - like other
states across the country - to save money on property taxes by
classifying land as farmland. But unlike other states, South
Carolina made changes a decade ago to tighten requirements and
prevent counties from losing out on tax collections.
South Carolina has no specific law providing a tax
exemption for farmland, but a law enacted in 1975 allows
agricultural land to be taxed at a different assessment rate.
Under the law, agricultural land can be taxed at an
adjusted rate as long as it remains in agricultural production
and the taxpayer applies for the special rate each year.
Beginning in the 1980s, county officials and farm lobbyists
began a push to tighten a loophole in the law. Lawmakers heard
stories of prime land around Columbia's Lake Murray being
classified as farms or timberland and owners saving thousands
of dollars in property taxes.
Lawmakers tightened up the code in the 1990s, requiring a
minimum of 10 acres for farms with crops and 5 acres for
timberland, or requiring the owner to show $1,000 of gross
income from the property for 3 of 5 years.
"Since that time, we haven't really heard any complaints,"
said Gary Spires, state legislative coordinator for the South
Carolina Farm Bureau Federation.
Developers still are able to use the tax break on property
they own, but a landowner may be assessed for back taxes for
up to five years preceding the tax year when the property was
valued and assessed for nonagricultural use, according to Beth
Crocker, an attorney for the state Agriculture Department.
The size of the tax break varies based on the type of
agriculture production and use of the land, Crocker said.
Midlands developer Stewart Mungo said his company uses the
tax break on property it owns.
"All developers probably use it to some degree," said
Mungo, president of The Mungo Co. "It artificially lowers your
tax rate."
But Mungo said he thinks the state's tax code should be
updated to provide different categories for farmers and
developers. "A piece of land purchased specifically as an
investment probably should be another category," he said.
Although the state's agricultural tax break law has been
strengthened, farmland continues to disappear.
South Carolina ranks fourth among the states in conversion
of farmland to developed property, according to the state
Agriculture Department. Farmland accounted for 23 percent of
all land in the state in 1992; that was down from for 57
percent in 1954, according to department statistics.
Still, about 460,000 jobs in the state are in the field of
agribusiness.
Dairy farmer Tom Trantham of Pelzer receives the break on
his 95 acres of land, but says it's not enough to make or
break him. Farmers are being chased out of business because of
low prices on products and encroaching development, he said.
Trantham said he would like to see the state do more to
help farmers, including deleting property taxes for farmers
provided that at least 90 percent of their total income comes
from the farm.
"We really need to take action on protecting our farms here
in South Carolina," Trantham said.
