FOREST TAXATION IN THE UNITED STATES 103 
taken by settlers did not determine the unit price of the larger tract 
held as a whole.” 
This principle in valuation is apparently considered by the State 
Tax Commission of Michigan, for, in reassessing a township in the 
forest-land region of Michigan, a considerably lower value per acre 
was placed upon cut-over land, which was part of a large lumber- 
company holding, than upon a small parcel of the same physical 
character but owned by a farmer. The farmer’s small tract could 
be sold at retail for a higher price than could be obtained for the 
larger adjoining tract. ‘To be sure, the larger tract was divisible 
into 40-acre units and was, in fact, assessed in such units; but, 
because no large number of these small units could be sold, the 
tract was held as a whole and valued at the amount which it would 
bring on the wholesale land market. This principle is an important 
one in the valuation of forest lands. 
Sale prices of course reflect the capacity of a property to yield 
income, both at the time of sale and in the future. The laws in 
three of the States specifically provide that income may be con- 
sidered as a factor in determining assessed value. The laws of 
Oregon provide that value shall be— 
taken to mean the amount such property would sell for at a voluntary sale made 
in the ordinary course of business, taking into consideration its earning power 
and such other factors as may be applicable for determining such value (44). 
Since 1924 the Iowa assessment laws have provided that— 
in arriving at said actual value the assessor shall take into consideration its 
productive and earning capacity, if any, past, present, and prospective, its 
market vale, if any, and all other matters that affect the actual value of the 
property (25, p. 220). 
The laws of North Carolina now provide that the assessors, in 
determining the value of real property— 
shall consider the past income derived therefrom, its probable future income 
PES ES BD 
In many other States, capitalized income is used to determine 
the assessed value of certain classes of property, such as mines and 
public utilities which are rarely, if ever, sold in the open market 
and consequently have no real market value. In determining value, 
even when there is actually no market, all conditions that would 
affect a market if there were one must be considered (60, p. 4). 
It is being repeatedly urged (24, p. 17; 41, pp. 48-49) that income 
or earning capacity be used to a greater degree and even be the pri- 
mary consideration in fixing assessed valuations, although at present it 
is mentioned as a legal basis for fixing assessments in only three States. 
It should be kept in mind that income is one of the factors that 
influence the determination of value in the actual market, and no 
State laws forbid the assessors from collecting income data to support 
their estimate of market value. 
The courts seem to be in general accord that all factors or evidences of value 
must be considered in deducing a market value. In Utah—Idaho Sugar Co. 
v. Salt Lake County—a Utah Supreme Court case, 210 Pac. 106, 27 A. L. R. 874, 
the court says: “In arriving at the actual value of tangible property for taxa- 
tion, everything, such as goodwill, earning capacity, the productiveness cf the 
property, and actual earnings which may influence or enhance the actual value 
of the tangible property, should be considered (60, p. 6). 
eee Lumber Co. v. Louisiana Tax Commission, Fourteenth District Court of Louisiana, Allen 
arish. 
36 North Carolina Revenue and Machinery Acts, 1931, p. 164. 
