FOREST YIELD TAXES 33 



. Cutting exempt from the yield tux. — Ail but three States — Alabama, 

 Louisiana, and Oregon — provide in a general way for the exemption 

 of certain products from the yield tax. The exempt cutting is limited 

 to that made for the use of the owner, or in some States, his tenant. 

 The purpose of the exemptions is to permit the untaxed use of wood 

 from the owner's property for fuel, in harvesting forest products, and 

 in some States for fences and buildings. Massachusetts and New 

 York limit the exemption in any one year to a value of $25. 



The New York law provides that an owner may, with the approval 

 of the conservation department, make thinnings for the improvement 

 of the forest growth. No other State has taken steps to exempt from 

 the yield tax those low-value harvests that are made to improve the 

 forest. These consist principally of thinnings in crowded stands 

 and the removal of slow-growing, limby, deformed, or otherwise de- 

 fective trees, as well as those of the less desirable species that will 

 have little value when they reach maturity. The removal of such 

 trees to provide growing space for good trees is one of the most im- 

 portant cultural and economic needs in many of our forest areas. 

 Usually the operation is a fairly costly one; often it is unprofitable 

 in terms of current costs and returns, and is undertaken only because 

 of the increased value to the remaining stand. To the extent that 

 yield taxes add to the cost of such improvement cuts they are operating 

 against good forestry. Granted that the exemption of such harvests 

 would increase the difficulty of administering a yield tax, the encour- 

 agement to forestry should be weighed against these problems. The 

 loss of revenue from such exemptions would probably be slight. 



Collection of the yield tax. — Though the tax on land is paid to the 

 local officials in the same mamier as an ad valorem tax there are a 

 variety of provisions covering the payment of yield taxes. In eight 

 States collection is through local officials — town officials in Connecti- 

 cut, Massachusetts, New Hampshire, and New York, and county offi- 

 cials in Idaho, Minnesota, Oregon, and Washington. In the other 

 six States payments are made to State officials. The department of 

 conservation or the conservation commission collects the yield tax 

 in Alabama, Michigan, Missouri, and Wisconsin. Yield-tax collec- 

 tions are made by the Collector of Ee venue in Louisiana and by the 

 State Tax Commission in Mississippi. 



Ample provisions are contained in the different laws to safeguard 

 the collection of the yield tax. In many of the States the tax is a lien 

 on the wood even though it may be manufactured or incorporated 

 with other materials. In Connecticut and New York the tax must 

 be paid or a sum deposited to cover the tax before the products cut 

 may be removed from the property, and Washington requires cash 

 or a bond to insure payment of the tax before timber may be removed. 

 A bond or cash is required in Minnesota, and a bond in Idaho and 

 Michigan. A bond to assure the payment may be required in New 

 Hampshire, Oregon, and Wisconsin if it is considered necessary by 

 the officials administering the law. 



FOREST-PRACTICE REQUIREMENTS 



A requirement calling for a minimum level of forest practice is not 

 an essential part of the yield-tax principle but through common prac- 

 tice such a requirement is accepted in yield-tax legislation. There 

 i 



