Federal and State Tax Treatment of Private Forestland

The Society of American Foresters (SAF) believes tax policies based on equity and certainty are required to encourage the nation’s private forest landowners to make sustained, long-term capital investments in forest management. Rather than distorting market forces, taxation of private forest landowners should be comparable if not equitable to other capital ventures, including agriculture, as this will encourage practices that retain forests that contribute monetary and societal benefits to the nation. Alleviating any prevailing uncertainty in tax policies relating to forest management is important to forest landowners due to the unique and long-term characteristics associated with timber and forest management investments, including the intergenerational transfer of forestlands and the acceptance of long term risks by forest landowners.  Ultimately, the nation should strive for sustainable forests, where the economic, environmental, and social values provided from forests are in balance. Sound tax policy will ensure sustained environmental and social benefits within a predictable economic framework. Incentives such as use value property taxation, expensing of management expenses, capital gains treatment of timber sale revenue and the reforestation expense and amortization are tools to reduce the burden of forest management and should be maintained. To encourage management of healthy forests, equitable tax treatment as well as strong markets and reasonable regulations are necessary. 

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