TIMBER EXCISE TAX

84.33.075 NONPROFIT YOUTH ORGANIZATIONS

Description: Timber harvested on lands owned by a nonprofit organization is exempt from the timber excise tax, if the land is exempt from property tax. The only nonprofit organizations eligible are those that maintain youth programs available to all, regardless of race, color, national origin, ancestry, or religious belief.

Purpose: To support the work of nonprofit youth organizations.

Category/Year Enacted: Nonprofit - charitable or religious; 1980.

Primary Beneficiaries: A few nonprofit youth organizations have previously utilized the exemption; only one does so consistently. Generally, this consists of removal of damaged or dangerous trees from camp facilities.

Conflict With Other Programs: None evident.

Tax Savings ($000): Minimal.

84.33.077 CREDIT; PROPERTY TAX ON PUBLIC TIMBER

Description: Standing timber under contact for harvest on nonfederal public land is subject to personal property tax and the timber excise tax. However, timber on private and federal land is only subject to the timber excise tax. This exemption allows the harvester to credit the amount of the property tax paid on such timber against the timber excise tax.

Purpose: The credit was enacted to lessen the revenue impact on timber dependent counties. A property tax shift to non-timber property and a potential loss of revenue to taxing districts was avoided by maintaining the property tax and allowing the credit against the timber excise tax.

Category/Year Enacted: Other; 1983.

Primary Beneficiaries: Owners of nontimber property who might otherwise experience an increase in property taxes, public timber harvesters and local governments.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
State taxes 5,975 6,431 6,887 7,342
Local taxes - - - - - - - -

If the credit were repealed, would the estimated revenue be realized? Yes; but this would increase property taxes for other taxpayers in counties with substantial public timber lands and reduce regular levy revenues of local taxing districts.

84.33.0775 TIMBER TAX CREDIT; SALMON HABITAT

Description: A tax credit is provided for timber harvested on land that is subject to enhanced aquatic resource requirement such as riparian zones, steep or unstable slopes, etc. The credit effectively lowers the overall 5.0 percent tax to 4.2 percent; all of the credit is taken against the state portion of the tax.

Purpose: To help offset the costs to timber owners associated with setting aside larger timber buffers aimed at improving salmon habitat.

Category/Year Enacted: Economic development; 1999, effective for timber harvested on and after January 1, 2000.

Primary Beneficiaries: Timber owners (and salmon).

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
State taxes 2,100 7,900 7,900 7,900
Local taxes - - - - - - - -

If the exemption were repealed, would the estimated revenue be realized? Yes.

84.33.086 $50 MINIMUM TIMBER TAX

Description: Any harvester incurring less than $50 in timber tax liability per quarter is excused from payment of the tax.

Purpose: The purpose is to support smaller harvesters and to reduce administrative costs.

Category/Year Enacted: Economic development; 1984 (increased from $10 to $50 in 1987).

Primary Beneficiaries: Small timber harvesters, mostly harvesters of private timber.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
State taxes 6 5 5 5
Local taxes 13 15 15 15

If the exemption were repealed, would the estimated revenue be realized? Yes.

84.33.170 CHRISTMAS TREES AND COTTONWOODS

Description: Christmas trees and short-rotation hardwoods, such as cottonwoods, that are grown by agricultural methods are not subject to the timber excise tax. However, if such trees are cultivated on land classified as timber land, they would be subject to the excise tax.

Purpose: The harvest of Christmas trees and short-rotation hardwood trees that are produced on agricultural land is considered similar to the cultivation of other types of agricultural products. Since agricultural crops are not subject to an excise tax, Christmas trees and short-rotation hardwoods have been exempted from timber excise tax.

Category/Year Enacted: Agriculture; Christmas trees, 1971; short-rotation hardwoods, 1995.

Primary Beneficiaries: Approximately 420 growers of Christmas trees and 10 producers of short-rotation hardwood trees.

Conflict With Other Programs: None evident.

Tax Savings ($000):* FY 2000 FY 2001 FY 2002 FY 2003
State taxes 89 91 95 98
Local taxes 354 363 382 391

*based on current DOR stumpage values.

If the exemption were repealed, would the estimated revenue be realized? Yes.