Understanding Oregon s Timber Tax Programs: How They Affect You

Transcription

1 Understanding Oregon s Timber Tax Programs: How They Affect You With Appendices A-C O R E G O N DEPARTMENT OF REVENUE Provided by Timber Unit, Property Tax Division (Rev ) 1

2 (Rev ) 2

3 Table of Contents Introduction... 4 Forest Products Harvest Tax... 4 Western Oregon Forestland and Privilege Tax Eastern Oregon Forestland and Privilege Tax Optional New Tax Program for Small Forestland Owners... 6 Privilege Tax Information... 7 Exceptions to Privilege Tax... 8 Western Oregon Small Tract Optional Tax... 8 Who is Responsible for Payment of Timber Taxes?... 9 How Do I Get My Timber Tax Forms? Example Information Glossary Appendices A-C How to Appeal a Notice of Deficiency or Assessment (Appendix A) Application for Designated Forestland (Appendix B) Highest and Best Use Forestland Appeal Petition (Appendix C) For More Information If you have additional questions or need help preparing your timber tax returns, contact the Department of Revenue at or toll-free in Oregon See our Web site, for a list of scheduled classes. This publication and Appendices D-H, , are available on our Web site. Timber District Offices Eugene 1600 Valley River Drive, Suite 310 Salem 955 Center Street NE (Revenue Building) (Rev ) 3

4 Oregon s Timber Tax Programs Forests contain Oregon s most valuable natural resource trees. The policy of the State of Oregon is to protect these forest resources and encourage the long-term management of the state s forests through its laws. Individuals and businesses own and pay taxes on more than 8.5 million acres of privately owned forestland. Before harvesting on all private and government land, a Notification of Operations (permit) must be obtained from the Oregon Department of Forestry. These permits are free. There is a $250 penalty for logging without a permit. Timber harvested from private land in Oregon is subject to two timber taxes, each requir- ing a timber tax return. The privilege tax is based upon value. The harvest tax is based upon volume. Oregon s major forest tax programs are: 1. Forest Products Harvest Tax (ORS ), 2. Western Oregon Forestland and Privilege Tax (ORS and ), 3. Eastern Oregon Forestland and Privilege Tax (ORS and ), and 4. Western Oregon Small Tract Optional Tax (WOSTOT) (ORS ). Forest Products Harvest Tax ORS This tax became effective on July 1, The Forest Products Harvest Tax is paid on timber cut from all land in Oregon. Revenue from the tax supports: The Forest Research Laboratory at Oregon State University; Emergency fire fighting funds for lands protected by the State of Oregon; The Oregon Department of Forestry to administer the Forest Practices Act on private land; and Operations of the Oregon Forest Resources Institute. The tax is paid annually to the Department of Revenue (DOR) by January 31 for harvested timber that is measured between January 1 and December 31 of the prior calendar year. The tax does not apply to the first 25 thousand board feet (MBF) harvested each calendar year. The tax rate can change annually due to balances in the emergency fire fighting fund and needs of other programs. The rate ($2.87 per MBF in 2002; $3.07 per MBF in 2003) is reviewed each legislative session. For an example of a completed tax return and instructions, see Appendix D (publication ) (Rev ) 4

5 Western Oregon Forestland and Privilege Tax (WOPT) (ORS and ORS ) and Eastern Oregon Forestland and Privilege Tax (EOPT) ORS and ORS Forestland in Western and Eastern Oregon is taxed on a split basis. Part is paid through the counties annual property tax assessments. The remaining is paid when timber is harvested (the Privilege Tax). The Department of Revenue (DOR) calculates the value of forestland that is taxed annually by the counties, based on a method prescribed by state statutes. Owners may apply to the county assessor to classify their land as Designated Forestland when it is being used for forest crop production but has a higher value for uses other than forestry. Designated Forestland is valued and taxed at a statutory land value for forest use rather than at its market value. Annual payment is made based on a percent of that value. When land is disqualified from this classification, it is subject to a rollback tax. Owners must have at least two acres of land to qualify for this program. HB 3575, enacted by the 1999 Oregon Legislature, made major changes in the taxation of forestland. Western and Eastern Oregon Privilege taxes for large owners will phase out by This transition period will help minimize the impact on schools and other taxing districts. Because of their differing needs, owners of less than 5,000 acres of forestland will transition differently than owners of 5,000 acres or more of forestland. The counties will provide the DOR with the information necessary to identify large and small forestland owners. The specific transitions are: Forestland Owners of 5,000 or More Acres: Forestland Starting July 1, 2000, county property taxes on these forestland tracts increased from 20 percent of the statutory land value to 75 percent. Starting July 1, 2003, county property taxes on these forestland tracts will increase from 75 percent of the statutory land value to 100 percent. Privilege Tax Starting calendar year 2000, these owners pay WOPT and EOPT at a reduced rate because of the increased land taxes. The rates will be: 5,000 ACRES OR MORE TABLE Year Western Oregon Eastern Oregon Percent Privilege Tax Privilege Tax Statutory Forest Land Value Taxed % 1.1% 75% % 0.8% 75% 2003 and beyond 0.0% 0.0% 100% (Rev ) 5

6 Forestland Owners of Less Than 5,000 Acres: These owners may have opted into the 5,000 or more acres program and have the property taxes on all their forestland increase from 20 percent of the statutory land value to 75 percent. The DOR must have received applications by April 1 prior to the property tax year (July 1 to June 30) in which the change applied. Starting July 1, 2003, property taxes on the forestland of those taking this option will increase from 75 percent of the statutory land value to 100 percent. In calendar year 2001 and beyond, small forestland owners who took this option, paid WOPT and EOPT at a reduced rate because of the increase in the land taxes. See the 5,000 Acres or More Table on page 5. Owners not opting into the 5,000 or more acres program may continue under the current program until July 1, They will pay annual property taxes based on 20 percent of the statutory land value. Owners who harvest will pay privilege tax at the 3.2 percent (WOPT) and 1.8 percent (EOPT) rates. Beginning July 1, 2003, these owners will automatically move to the 100 percent forestland tax (the 5,000 acres or more) program. Optional New Tax Programs for Small Forestland Owners: A new working group was directed to review state tax policies that affect nonindustrial small tract forestland in Oregon. The Department of Forestry has assembled the group. This working group will report its results and any recommended changes to the 2003 Legislature. If an alternative tax structure is not developed, small tract forestland owners will be subject automatically to the tax methods for large tract industrial forestland. Any new program developed by this effort will be optional for small owners. If small owners do not opt into the new program, they will automatically move into the 100 percent forestland value program on July 1, Non-Forestland Owners: Owners of land classified by the county assessor as other than forestland are exempt from paying the WOPT and EOPT upon harvesting. This became effective January 1, The Forest Products Harvest Tax is still required for all timber harvesters (Rev ) 6

7 Privilege Tax Information Standard Method vs. Small Owner Election Standard method: Timber owners must keep records of their harvests by species and log grades to figure their taxable values. Multiply the volume of timber harvested by the stumpage values for each species. Stumpage values are found in tables published by DOR. Taxpayers also may make certain adjustments to the taxable value based upon logging conditions, such as slope, and volume per acre. This filing method must be used by those harvesters who: Own more than 1,000 acres of forestland (this does not apply to the Eastern Oregon Privilege Tax) and harvest more than 500,000 board feet of timber in the current year or Own more than 10 percent of a lumber mill, chip facility or log-purchasing yard. The small owner election: Qualifying taxpayers (WOPT and EOPT) may use the net stumpage recovery method to figure taxable value. Under this method, filers report the delivered mill price for their logs minus one of the following (see Timber Tax Form Instructions for more information): a. DOR-allowed logging cost (average costs determined by DOR) or b. Costs reflected by a written logging contract (actual expenses under terms of a contract written prior to the harvest operation). This filing method may be used by those harvesters who: Own less than 1,000 acres of forestland (this does not apply to the Eastern Oregon Privilege Tax) or harvest less than 500,000 board feet in the current year (no acres limit) and Own less than 10 percent of a log processing facility, chip facility or log purchasing yard. Net Stumpage Recovery Computation Example A: Mill delivered price $10,000 Less department allowed logging cost 3,600 Taxable value $ 6,400 Example B: Mill delivered price $10,000 Less written contract logging costs 5,400 Taxable value $ 4,600 To see if you qualify and/or benefit by reporting under the Net Stumpage Recovery Method, see Appendices D H for instructions on the WOPT s Small Owner Election and EOPT s Small Harvester Election forms (Rev ) Those harvesters not qualifying for the Small Owner Election must use the standard reporting method. 7

8 For Examples For examples of completed tax returns and instructions, see Appendices D H in publication The tax is paid to DOR annually by January 31 for harvested timber that is measured between January 1 and December 31 of the prior calendar year. Receipts are distributed to the State School Funds and counties. Exceptions to the privilege tax include: All lands classified other than highest and best use forestland or designated forestland. Most timber under the Western Oregon Small Tract Optional Tax Program, administered by the Department of Forestry. Timber from land assessed by DOR (rather than by county assessors), i.e. powerline right of way. Christmas trees and intensively cultivated hardwood fiber farms. Timber from land exempt from ad valorem taxation. Western Oregon Small Tract Optional Tax (WOSTOT) ORS (Rev ) 8 This classification is available only to small woodland owners in Western Oregon. It is an alternative to the Western Oregon Forestland and Privilege Tax program. This law became effective on January 1, Owners apply to the Oregon Department of Forestry for certification under this program. This program is open to those who own Western Oregon forestland totalling more than 10 acres but not in excess of 2,000 acres. When first classified, the land must have trees averaging less than 8 inches diameter at breast height (DBH), or less than 40 years old. Timber under this program is generally not subject to the Western Oregon Privilege Tax. Timber that is larger than 8 inches DBH but less than 40 years of age when first classified will be subject to the Western Oregon Privilege Tax for the first five years under the program. Land classified under this law is inspected by the Department of Forestry, and its productive capacity is measured. The Department of Forestry figures the value per acre of each class. The value is used by county assessors as specially assessed value for the land. Property tax is assessed based on 100 percent of the specially assessed value. The amount of the tax depends on site class value and the local tax rate. Western Oregon Privilege Tax forms still need to be filed even if the harvest is from WOSTOT land. Check the WOSTOT Exempt box and fill in the certification number supplied by the Oregon Department of Forestry. Beginning July 1, 2003, land under this assessment will be moved to the 100 percent forestland tax (5,000 acres or more) program. The Forest Products Harvest Tax is still required for all timber harvesters (not exempt). For more information, contact the Oregon Department of Forestry,

9 Who Is Responsible for Paying Timber Taxes? Oregon law requires the owner of timber at the time logs are first measured (scaled or weighed) to pay any timber taxes that may be due. Generally, logs are first measured when they are delivered and sold to a mill. When timber is to be sold, it is important that the parties involved understand who will be responsible for payment of timber taxes. The following information explains who is responsible for payment: The name of the party owning the logs when they are measured should appear as timber owner on the Notification of Operations (referred to as the logging permit) when the Department of Forestry is notified of plans to harvest. This assures that the party responsible for filing returns and paying the tax receives filing instructions and tax forms from the Department of Revenue. The legal owner of timber (taxpayer) may not contract away any responsibility to pay a tax liability. An arrangement of this type may be enforceable between parties but DOR will not recognize any attempt to shift liability from the legal taxpayer to another party. If you are unsure about who is legally responsible to pay timber taxes, the table below may help: Who Is Responsible? Type of Transaction Outright sale of standing timber only. Sale of land and timber by deed. Sale of land and timber by land sales contract. Sale of logs prior to any measure, e.g. from the landing. Trading timber for services, e.g. logging, land clearing reforestation and/or materials. Sale of delivered logs to a mill or conversion center. Timber given as a gift. Responsible Taxpayer Timber purchaser (at the tax rate of the landowner). Purchaser of property. Purchaser of property. Purchaser of the logs (at the tax rate of the landowner). Person receiving timber (at the tax rate of the landowner). Legal owner of the logs. Recipient of gift (at the tax rate of the landowner) (Rev ) 9

10 How Do I Get My Timber Tax Forms? Oregon law requires anyone planning to harvest timber from all lands public and private to take out a Notification of Operations (logging permit) with the Department of Forestry. Logging without this permit could result in a $250 fine. DOR receives a copy of this permit and any corrections, and will mail timber tax forms to pay the tax to the party listed as timber owner on the permit. Logging permits are valid only during the calendar year in which they are obtained. If your harvest continues into the next year, you must renew the permit. If you harvested in December and harvested more in January, you need to renew your permit and file a return for both years. Forms are mailed out in December each year. The timber tax forms contain information from the permit, including taxpayer name (timber owner), address, and harvest location. For examples of completed tax returns and instructions, see Appendices D H in publication number If you take out a permit, but do not harvest, you must still file timber tax returns with DOR. Check the No Harvest box, sign, and mail the return(s) to DOR. Permit Reporting requirement ORS Sellers of logs are required to provide the log purchaser with information concerning the source of each load of logs. The information to be provided is the number attached to the Notification of Operation (example ) and the name of the person identified on the permit as the timber owner. This information is used for checking compliance with the timber tax laws. The penalty for not providing valid permit information to the log purchaser could be as high as $1,000 per permit. For Examples of Completed Timber Tax Forms Examples of completed tax returns and return instructions are available in DOR s publication, Understanding Oregon s Timber Tax Programs, Appendices D H, number Contact DOR at You can download the appendices from our Web site at (Rev ) 10

11 Glossary Ad valorem Annual tax based on value Adjusted gross volume An amount of wood deducted from the gross volume that still has a commercial value. This would include unsound wood that is still able to make chips for paper or wood that has been discolored by a fungus. Adjusted gross volume plus net volume make up the taxable volume. Amended Return A new form filed by the taxpayer to make necessary corrections showing the difference from the original return. Arm s Length Transaction A written agreement made in open market where there is no duress, each party is independent of each other, and no trades or hidden considerations are involved. Assessment A billing for taxes when a return has not been filed or a deficiency has not been paid or appealed. Deficiency A billing for taxes when errors on a return are corrected during the processing of the return or when, during an audit, a return is found to have not reported all volume or dollars or both. Designated Forest Land Land that has a higher and better use than forestland and has been designated as forestland at the request of the landowner and with the approval of the county assessor. Diameter Breast Height (DBH) The diameter of a tree measured approximately four and a half feet from the ground. Eastern Oregon The portion of the state east of a line beginning at the intersection of the northern boundary of Oregon and the western boundary of Wasco County, southerly along the western boundaries of Wasco, Jefferson, Deschutes, and Klamath counties to the southern boundary of Oregon. Basic Logging Cost Total costs of moving logs from the stump to the mill. Business Identification Number (BIN) Assigned by the DOR to every timber taxpayer (individual or business). Board foot A unit of measurement representing a board one foot long, one foot wide, and one inch thick. Bolt A segment sawn or split from a log or any short log (usually cedar) used for shakes and shingles. Bolts are not taxed. Chips A small piece of wood used in the manufacture of paper and particleboard. Conifer A tree with cones and needle-shaped leaves. It produces wood known commonly as softwood (fir, pine, spruce, and cedar). Contract A written, signed, and dated agreement with an explanation for logging showing rate, type of payment (by the ton, lump sum, or thousand board feet (MBF), and the work to be completed (Rev ) 11 Estimated tax Tentative calculation of tax due. Extreme Logging Conditions Conditions beyond the control of the logger that greatly increase logging costs, i.e., over 1,000 foot average yarding distance, logging over streams and highways, or the use of special equipment such as helicopters. Pre-harvest approval of special logging cost adjustment is required from the DOR. Fee Timber Private timber that is owned free and clear. Forestland Land where the highest and best use is the growing and harvesting marketable species of trees or land that has a higher market value than forestland, such as commercial or residential property, but that is being held or used predominantly for growing and harvesting trees and has been designated as forestland through application to the county assessor. Forestland does not include trees, buildings, or machinery. Gross Volume The full volume of a log before defects are subtracted. This volume is not used for tax calculations.

12 Hardwood Generally trees that have broad leaves which are shed in winter and do not have cones. Usually these trees have denser wood (alder, maple, and oak). Harvest Unit A geographical area from which timber is harvested, no larger than 320 acres. It must be entirely within one county and one timber value area, and must be harvested by a single method. Highest and Best Use Forestland Land classified and assessed by the county assessor as Best- Use Forestland. Large Owner A landowner who owns more than 5,000 acres of forestland in Western Oregon or who owns more than 5,000 acres of forest land in Eastern Oregon, or one who has applied to be taxed as a large owner. Log Grade An estimate of the type and quality of lumber recovered when the log is sawed. Log Purchaser A company or person who purchases logs to be manufactured or processed. MBF Thousand board feet (1,000 bf). Net Stumpage Recovery Value of logs at a mill less the cost of logging and transport. Net volume Gross volume minus defect. This measurement, along with adjusted gross volume, is used in tax calculations. Non-Forestland Owners A person who harvests timber from other than designated forestland or land assessed as Highest and Best Use Forestland. Peeler A log from which veneer is peeled for the production of plywood. Permit (Notification of Operations) Notice of intent to harvest timber given to the Oregon Department of Forestry, which furnishes a copy to DOR. Timber tax forms are mailed to the party indicated as timber owner. Salvage Wood Usually logs of poor quality, utility, and special cull, dead or burned, which are removed before further deterioration can take place (Rev ) 12 Sawlog Any log that is sawn to produce lumber. Seller of Logs A company or person who sells logs to a processing facility. Slash Material such as limbs and pieces of logs usually burned or left in the woods after a harvest. Slash is exempt from timber taxes unless it is removed from the woods in log or chip form. Small Owner A landowner who owns less than 5,000 acres of forestland in Western Oregon or Eastern Oregon. Small Sawlogs A classification of logs used by the Department of Revenue to describe conifer saw logs less than 9 inches in diameter and purchased by weight. Special Cull Logs that do not meet the minimum requirements of peeler or sawmill grade logs, but are suited for rotary cutting of veneer. Special culls are included in the definition of adjusted gross volume. Species Type of tree. Common species in Western Oregon: Douglas Fir, Western Hemlock, and Red Alder. Common species in Eastern Oregon: Ponderosa Pine and Lodgepole Pine. Stumpage Timber in unprocessed form as found in the woods. Stumpage Value The appraised value of standing timber. Thinning Cutting in an immature stand to increase its rate of growth and to promote sanitation. DOR allows no more than 35 percent of the volume to be harvested to qualify as a thinning adjustment. Timber All logs that can be measured in board feet and meet the minimum of utility cull or better, and other forest products as determined by department rule. Timberland Specially Assessed Value A value set by Legislature. Adjusted by DOR using statute and rules to accommodate changes in the market. Timber Owner An individual or combination of individuals, any partnership, firm, corporation, or association of any nature holding title to

13 harvested timber at first measurement. The party responsible for the timber taxes. Utility Cull Logs that do not meet the minimum requirements of peeler or sawmill grades, but are suitable for the production of firm, usable pulp chips. Utility cull is included in the definition of adjusted gross volume. Western Oregon The portion of the state west of a line beginning at the intersection of the northern boundary of Oregon and the western boundary of Wasco County, southerly along the western boundaries of Wasco, Jefferson, Deschutes, and Klamath counties to the southern boundary of Oregon. Western Oregon Small Tract Optional Tax (WOSTOT) A program administered by the Department of Forestry. Owners pay tax on the land according to site class. With some exceptions, the timber is not subject to the WOPT. Program is open to owners with 10 to 2,000 acres of forestland and trees less than 40 years old (Rev ) 13

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15 Appendix A: Information Circular October 2002 How to Appeal a Notice of Deficiency or Assessment O R E G O N DEPARTMENT OF REVENUE Appealing a Notice of Deficiency If you disagree with a Notice of Deficiency and want to appeal, you must appeal in writing. The appeal must be postmarked within 30 days from the date on our notice. If you don t send a written objection or request a conference within 30 days from the date on our notice, you will receive a Notice of Assessment. You have three appeal options. If you decide to appeal, choose one of the appeal options listed: Option A: Written objection Send a letter and tell us why you disagree. Within 30 days from the date of the notice, send your letter to: Oregon Department of Revenue 955 Center St NE Salem OR When you write, include your full name, current mailing address, Social Security or other identifying number (for example, federal ID or BIN), the tax year(s) involved, the account number(s) involved, and the issue you are appealing. Also include a telephone number where you can be reached during the day. Keep us informed of any changes in your address or telephone number. We will review your letter, try to resolve the matter, and send you a written decision. If an auditor adjusted your return, that auditor will review the information you provide and send you a written decision. If you disagree with the decision, you may continue your appeal. You will receive new appeal instructions. Option B: Conference In writing, request a conference and tell us why you disagree with the Notice of Deficiency. Send your letter to: Oregon Department of Revenue 955 Center St NE Salem OR When you write, include your full name, current mailing address, Social Security or other identifying number (for example, federal ID or BIN), the tax year(s) involved, the account number(s) involved, and the issue you are appealing. Also include a telephone number where you can be reached during the day. Keep us informed of any changes in your address or telephone number. A conference officer will discuss the matter with you (or with someone you choose to represent you), usually by telephone. The conference officer will send you a written decision. You may choose to receive our decision by either regular mail or certified mail. If you disagree with the decision, you may continue your appeal. You will receive new appeal instructions. Option C: Go directly to Appealing a Notice of Assessment If you disagree with a Notice of Deficiency and don t want to send a written objection or have a conference, you can appeal to the Magistrate Division of the Oregon Tax Court. There is a filing fee. If you want to appeal to the Magistrate Division, you must first send a letter to the Department of Revenue within 30 days from the date on our notice. Send your letter to: Oregon Department of Revenue 955 Center St NE Salem OR In the letter you must: 1) tell us that you don t want to send a written objection or have a conference (Options A and B); and 2) ask us to assess your tax so you can appeal to the Magistrate Division. You will receive a Notice of Assessment with further appeal instructions. Once you choose an appeal to the Magistrate Division, the choice cannot be changed. See Appealing a Notice of Assessment. Appealing a Notice of Assessment If you disagree with the tax shown on a Notice of Assessment, you have the right to appeal. You must ap B (10-02) (Rev ) (over) 15

16 peal to the Magistrate Division of the Oregon Tax Court within 90 days from the date of the Notice of Assessment. You may be able to resolve certain issues without appealing to the Magistrate Division. Write to the Department of Revenue if your disagreement concerns one of the following issues: The date or amount of payments made to your account. A request for waiver of the penalty or interest charge. The charges for interest on underpayment of estimated tax. Send your letter to the Oregon Department of Revenue, 955 Center Street NE, Salem OR Tell us in writing why you disagree or why penalty or interest should be canceled. Most disagreements concerning these issues can be resolved with the department. Appealing to the Magistrate Division of the Oregon Tax Court Complaint forms for appealing to the Magistrate Division are available from the Tax Court and must be returned to the court within 90 days from the date on the Notice of Assessment. At the Magistrate Division, you may choose a Small Claims case or a standard case. To file an appeal, the correct filing fee must be sent with the complaint form. The fees are: Small Claims case...$10 Standard case... $25 To request a Small Claims case, the tax in dispute must be $5,000 or less. The decision from the Small Claims case is final and cannot be appealed. Standard cases have no dollar limit and the decision may be appealed to the Regular Division of the Oregon Tax Court. To appeal a Notice of Assessment, contact: Magistrate Division, Oregon Tax Court 1241 State St, Third Floor Salem OR Internet: Further appeal rights For personal income tax, withholding tax, corporate income or excise tax, fiduciary income, or timber tax: If you pay your Notice of Deficiency in full, your deficiency is considered assessed either on the date of your payment or 30 days from the date of the notice, whichever is later. If you do not timely appeal, you have two years from the date your account is paid in full to appeal the assessment. Appeal to the Magistrate Division of the Oregon Tax Court. There are some cases where you may ask us to cancel taxes even if you did not file a timely appeal. Please call us to see if you meet the conditions for doubtful liability relief. For any other tax program administered by the department: You must appeal within 90 days of the assessment date or the assessment is final and cannot be changed unless you meet the conditions for doubtful liability relief. Please call us for further information. Interest charges Appealing a deficiency or an assessment will not stop interest from accruing on the taxes owed. Interest is figured from the due date of the return to the date of payment. Interest is charged even if you have filed an extension. If your appeal reduces the tax due, the interest charges will also be reduced. Paying your account You may pay your account at any step of the appeal process. Payment does not mean you agree with the notice. Payment stops interest from accruing on your account. Note: Visa and MasterCard can be used to pay a Notice of Assessment. Call (in Salem) for information. Questions? Telephone: Salem Toll-free within Oregon TTY (hearing or speech impaired; machine only): (Salem) or (toll-free within Oregon). Americans with Disabilities Act (ADA): This information is available in alternative formats. Call (Salem) or (toll-free within Oregon). For general tax information: Asistencia en español. Llame al en Salem B (10-02) (Rev ) 16

17 Appendix B: APPLICATION FOR DESIGNATION OF LAND AS FORESTLAND and for special assessment as provided by ORS to in Western Oregon and ORS to in Eastern Oregon FOR ASSESSOR S USE ONLY Approved Denied Date Received Date: By: Comments: INSTRUCTIONS: Your application must be filed with the county assessor by April 1. Additional requirements and general information are located on the back. Read and complete both sides of the form. Filed with the County Assessor for the tax year beginning July 1, 20. Name Street address City Telephone Day: ( ) Evening: ( ) State ZIP Code DESCRIPTION OF PROPERTY Fill in the boxes below to show the property you want to have designated as forestland. If you are applying for only a portion of the land described, please indicate the area by providing a sketch below. Date Acquired Assessor s Account Number Map and Tax Lot or Parcel Number Acres Applied For (see #8 on the back) Total Applied For: acres Total acres of forestland under your ownership in: Eastern Oregon: acres Western Oregon: acres If you own less than 5,000 acres of forestland in either Eastern or Western Oregon, you have the option of being assessed at a higher value with a reduced privilege tax. For more information, call the Oregon Department of Revenue at DESCRIPTION OF LAND FOR DESIGNATION AS FORESTLAND Sketch a diagram of the tax lot(s) and shade in the area being applied for designation as forestland. See the example shown below. Include placement of structures, roads, creeks, etc. Example DECLARATION As owner of the above described land, I indicate by my signature that I am aware of the potential tax liability involved when the land ceases to be designated as forestland. I declare under the penalties of false swearing (ORS (4)) that I have examined this document (and any accompanying documents), and to the best of my knowledge, it is true, correct, and complete. Applicant s Signature Date X (Rev. 1-00) (Rev ) 17 Additional requirements on the back

18 PROPERTY INFORMATION 1. Is the predominant purpose of this land to grow and harvest trees of a marketable species? Yes No 2. How many acres applied for currently meet the minimum number of trees per acre required by the State Forester? 3. Is there a forest management plan for this property? Yes No If yes, please summarize the nature and extent of implementation. (Attach additional pages if necessary.) 4. Is this a change from another special assessment program? Yes No 5. Briefly summarize current and continuing activity in growing and harvesting trees. 6. Briefly summarize your past experience and activity in growing and harvesting trees. (Experience in years, location, work done, etc.) 7. To what extent do domestic animals use the property for grazing? (Kinds of animals, number of head, length of grazing, etc.) 8. Is any portion of the land subject to a lease option? (Which permits it to be used for a purpose other than the growing and harvesting of trees.) Yes No If yes, briefly explain. 9. Has any part of the property been platted under ORS Chapter 92? Yes No 10. Is this property protected from fire by one or more of the following? Yes No If yes, check all that apply. Payment to a fire protection association Payment to the fire patrol assessment By protection devices Other (explain how) GENERAL INFORMATION (ORS to in Western Oregon; ORS to in Eastern Oregon) 1. Definition of Forestland. Forestland is land which either is being held or used predominantly to grow and harvest trees of a marketable species and has been designated as forestland (see #2) or is land the highest and best use of which is to grow and harvest such trees. 2. Requirements for Designation. The land is held or used predominantly to grow and harvest trees of a marketable species. Grazing, recreation, or other types of uses shall not interfere with the growing and harvesting of the trees. In addition, the Oregon Department of Revenue Administrative Rules (OAR (2) and OAR ) require the following: a. Land may qualify if the designated area is at least two contiguous acres in one ownership. b. The land must meet one of the following stocking requirements: 1) To qualify, there must be at least a minimum number of trees per acre (OAR ) and these trees growing on the land must be of a marketable species (OAR ) according to rules established by the state forester. 2) If the land does not meet the requirements in #1 above, the owner must give the assessor a written management plan for establishing trees to meet the minimum stocking requirements. 3. Application Deadlines. An owner of land desiring that it be designated as forestland must apply to the county assessor on or before April 1, of the assessment year for which the land is to be assessed as forestland. The owner may apply within 30 days after receiving notice of its assessment as omitted property. 4. Approval of Application. The assessor approves the application and designates the land as forestland. The application shall be deemed to have been approved unless prior to August 15 or within three months after the application is filed, whichever is later, the assessor gives the applicant written notice of denial. 5. Description of Land Applied For. The application includes the total land ownership or a small portion of such ownership. Make a drawing on this application (on the front or on a separate sheet) to show the location of the forestland being applied. Owners who have extensive holdings may (Rev. 1-00) (back) submit maps, which indicate the desired parcels, lists of legal descriptions, or lists of assessor s account numbers if the numbers and descriptions are current and include only land eligible for designation. 6. Marketable Species of Trees. Species of trees which are currently being harvested and used or sold within a particular locality. Consult the county assessor or Oregon Department of Revenue if you have questions about species. 7. Valuation of Forestland. Land designated as forestland will be valued at forestland value even though it has a higher market value for other purposes. 8. Date of Acquisition. List the acquisition date if any portion of the property was acquired within the last five years. If it was acquired more than five years ago, state that fact but list no dates. 9. Removal of Designation. When the designation of forestland is removed, an additional tax will be extended against the land and added to the next general property tax roll of an amount equal to the difference between the taxes assessed against the land and taxes that would have been assessed had it not been specially assessed, for each of the last five years (or number of years under forest deferral if less than five) preceding the years in which the land was disqualified from forest special assessment. The number of years must not exceed five. 10. Reasons for Removal of Designation.A. Upon notification by the owner to remove the designation. B. Upon sale or transfer to an ownership making it exempt from ad valorem property taxation. C. When the assessor or state forester discovers that the land is no longer being managed as forestland. D. The act of platting the land under ORS Chapter Right of Appeal. A taxpayer whose application has been denied, in whole or in part, or a taxpayer whose forestland has had the designation removed, in whole or in part, may appeal to the Oregon Tax Court, Magistrate Division within 90 days after he or she knows of the above acts, but not later than one year after the act. (ORS ) (Rev ) 18

19 Appendix C: Petitioner s Name O R E G O N DEPARTMENT OF REVENUE HIGHEST AND BEST USE FORESTLAND APPEAL PETITION Only for use in appealing highest and best use forestland For Department Use Only Date Received Petition Number Address City State ZIP Code To be considered filed timely, a petition must be filed by December 31 of the current tax year. Home Telephone ( ) Property Address (if different) Work Telephone ( ) A petition must be signed by the petitioner or a representative with an authorization. Please attach a copy of your property tax statement. City State ZIP Code County where property is located Assessor s Account Number(s) Petitioner s estimate of value Tax Year(s) $ Value being appealed (as listed on the tax rolls) $ Yes No Explain the reason(s) for your appeal. Mail to: Director Oregon Department of Revenue 955 Center Street NE Salem OR If the department determines your appeal should be heard at the county level, would you like to be present at the hearing? DECLARATION I declare under the penalties of false swearing [ORS (4)] that I have examined this document, and to the best of my knowledge, it is true, correct, and complete. Signature of Petitioner or Authorized Representative (authorization must be included) Print Name Date X AUTHORIZATION TO REPRESENT Complete this section only if you will be represented. You may represent yourself in an appeal to the Department of Revenue. You may also have witnesses testify for you. However, if you choose to be represented, you can only be represented by a person listed in the box below. I authorize to represent me in this appeal before the Department of Revenue. Signature of Petitioner Print Name Date X My authorized representative is: (Check one) A person licensed or authorized to perform real estate appraisals in Oregon. A licensed real estate broker as provided in ORS (4) An attorney licensed to practice in Oregon. A public accountant licensed to practice in Oregon. Mail correspondence to: Authorized Representative Address A tax matters shareholder of an S corporation as provided in ORS (3). City State ZIP Code My employee regularly employed in tax matters. Telephone Number ( ) (Rev ) (Rev ) 19

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