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Goal: Apply Knowledge Globally State-level programs to reduce property taxes on forestland vary widely in requirements and implementation across the nation

Forested landscape

Privately-owned forest land can provide many economic benefits. State programs can reduce property taxes for forest land, but landowners must comply with the requirements in state law. (Forest Service photo by Gregory Frey)

Introduction

All states in the U.S. have programs that lower property taxes for qualified forest land, which is justified by the economic benefits and non-market amenities that forests provide. Researchers at the University of Minnesota and the Southern Research Station dug into the tax laws in all 50 states to understand their requirements for enrollment and methods of implementation. They found wide variation in what states require from landowners in order to enroll land parcels, penalties for withdrawal, and the agencies that implement the programs.

Summary

Financial incentives offered by state property tax programs are a means of promoting goods and services from private forestland. Comprehensive information about the variety of program arrangements used by other states can empower managers and policymakers to more wisely compare and possibly adopt programs for their home state, especially tax classifications, eligibility requirements, administrative procedures, management plan requirements, penalties for noncompliance, and the public and private organizations responsible for program implementation. Identified by a 50-state review, these property tax programs often require adherence to several conditions: valid ownership and use of forestland, correct size of parcel and suitable forest conditions, implementation of professionally prepared forest management plans, notifying authorities of intent to harvest timber, willingness to participate in reviews and inspections, and an understanding of potential financial or procedural penalties. Implementation of these administrative conditions may require the involvement of several agencies at many levels of government, most frequently offices of local governments with support from citizen advisory committees and boards, tax review appeals and equalization boards, forestry boards and commissions, forestry divisions within state natural resource departments, and state departments of finance and revenue.

Listen to a brief audio clip by author Gregory Frey describing this publication.  •  Text Transcript

Principal Investigator
Gregory Frey, Research Forester
RWU
4804 - Forest Economics and Policy
Strategic Program Area
Resource Management and Use
Publications
State property tax programs promoting sustainable forests in the United States: A review of program structure and administration
State property tax incentives for promoting ecosystem goods and services from private forest land in the United States: a review and analysis
CompassLive Story
Promoting Ecosystem Services with State Property Tax Programs
External Partners
Michael Kilgore, Professor, University of Minnesota
Paul Ellefson, Professor Emeritus, University of Minnesota
Travis Funk, Former Graduate Research Assistant, University of Minnesota