Pubdate: Wed, 25 Jun 2014
Source: Victoria Times-Colonist (CN BC)
Copyright: 2014 Times Colonist
Contact: http://www2.canada.com/victoriatimescolonist/letters.html
Website: http://www.timescolonist.com/
Details: http://www.mapinc.org/media/481
Author: Bill Cleverley
Page: A3
Bookmark: http://www.mapinc.org/mmjcn.htm (Cannabis - Medicinal - Canada)

MEDICAL-POT TAX BREAK NIPPED IN BUD

B.C. prevents growers from getting farm classification for assessments

A loophole that gave medical marijuana factories a massive tax break 
is being nipped in the bud by the B.C. government.

"The government has made the decision that medical marijuana as well 
as any other federally regulated narcotic will not be eligible for 
farm classification for property taxes," Coralee Oakes, Minister of 
Community, Sport and Cultural Development, told the Times Colonist on Tuesday.

Many local governments have been raising the alarm about the 
so-called "llama loophole" that enabled new medical marijuana grow 
ops to claim farm status to avoid paying property taxes.

The term dates to 2012, when a Chilliwack business owner who had 
placed llamas on his land successfully argued that his commercial 
property was being used for agriculture. That saw his property tax 
bill in 2013 drop to about $1,400 from the previous year's $156,800.

In April, new federal rules shifted marijuana production to licensed 
commercial growers from patients. Of the 13 approved producers, five 
are in B.C., including one in Central Saanich and one in Nanaimo.

The province will continue to view medical-marijuana production as an 
allowable farm use within the Agricultural Land Reserve that should 
not be prohibited by local government bylaws, Oakes said. This is 
consistent with the Agricultural Land Commission's interpretation of 
the Agricultural Land Commission Act.

The change will take effect for property assessments in the 2015 
taxation year, Oakes said, and the large, industrial-like growing 
operations will be taxed according to the physical infrastructure being built.

"Local governments were really concerned with how do we grapple with 
the taxation piece, with the fire and policing and all of those. So 
we just wanted to ensure there was clarification from assessment 
purposes what will be going forward," Oakes said.

The province's property tax rules set rates based on factors 
including how the land is used. Benefits of farm class include low 
land values and reduced tax rates. Farm tourism, sand and gravel 
operations and wineries - all approved activities on ALR land - also 
don't qualify for farm classification for assessment and property tax purposes.

The announcement was cheered by Juan de Fuca Electoral Area director 
Mike Hicks, who had raised the issue of potential massive property 
tax losses for local governments.

"That's wonderful. Not that I advocate more taxes for anyone, but it 
only makes sense," Hicks said.

A new grow-op is planned for an Otter Point industrial park next to 
the new Juan de Fuca administrative headquarters. Hicks said the 
owners have said they have no intention of claiming the farm tax 
status, but if they did, the potential loss of tax revenue would be huge.

"If the value of the property was $495,000 - $195,000 for the 
building, $300,000 for the land - the present taxes would be $7,300. 
If and when they apply [for farm status], their tax bill will be 
$172," Hicks said.

"The interested companies that are trying to establish in Juan de 
Fuca in our industrial park are bending over backward to say they 
want to pay their fair share of taxes," Hicks said.

Federal regulations for medical marijuana came into effect April 1.
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MAP posted-by: Jay Bergstrom