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Taranaki incorporation Paraninihi ki Waitotara and its lessees are fighting a tax change that will see farmers hit for tax if they sell their leases.
Under current law, the sale of West Coast lease farms is non-taxable, as is the sale of freehold farms.
PKW chief executive Dion Tuuta says the lease system is complicated, but it has been working well since the act was amended in 1997.
He says the proposed change will create uncertainty for everyone involved.
West Coast Settlement Reserves Lessees Association chair Ben Dickie says the changes lacked clarity, and making regulations more complex would be unduly harsh to both entities.
PKW owns 18,000 hectares of Taranaki Maori land held in perpetual leases, and also runs 15 dairy units and seven dairy support blocks on 2500ha.
It is trying to buy back leases as they come up for sale, but the change would mean a lessee selling a lease to PKW would be taxed on the value of the residual lease.
The draft legislation does not say how that value would be calculated.
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