FOREST YIELD TAXES 31 



The rate of tax. — Mississippi, the only State which bases the yield 

 tax for most products on volumes harvested, has established a fixed 

 schedule of rates. Saw-timber logs, cross ties, and veneer stock are 

 taxed at 15 cents per M feet; pulpwood, 6 cents per standard cord; 

 lightwood, 5 cents per ton ; turpentine, 6 cents per barrel ; poles and 

 piling, 1 percent of market or delivered price; all other timber, 

 15 cents per M feet. Timber shipped out of the State in unmanu- 

 factured form is subject to a tax of 20 cents per M feet. On the basis 

 of prices in 1950 the tax is estimated to average about 2 or 3 percent 

 of stumpage value. 



Of the States which use the percent-of-value basis, eight establish 

 rates which are uniform throughout the period of classification. In 

 Louisiana and New York the tax is 6 percent of the value of the 

 standing timber, or stumpage value. The Alabama tax is 8 percent. 

 Minnesota, New Hampshire, and Wisconsin set the tax at 10 percent, 

 and in Idaho and Oregon the yield tax is 12.5 percent of stumpage 

 value. 



Four States have yield taxes which increase progressively in the 

 first years after classification until the maximum rate is reached. In 

 Massachusetts the tax is 1 percent of stumpage value for products 

 harvested in the }^ear of application and increases by 1 percent yearly 

 to 6 percent in the fifth and following years. The Michigan tax is 

 graduated from 2 percent in the first year of classification to 10 percent 

 in the ninth and subsequent years. In Missouri the tax is 4 percent 

 of stumpage value for material cut from 1 to 10 years after classifi- 

 cation, 5 percent from 11 to 20 years, and 6 percent from 21 but not 

 to exceed 25 years after classification. In Washington the owner 

 pays a tax of 1 percent for each year that has expired from the date 

 of classification, until the maximum of 12.5 percent is reached. 



In Connecticut the yield tax depends on the age of the timber at 

 the time of classification. When land stocked with trees not more 

 than 10 years old is classified, it is taxed at a uniform rate of 10 per- 

 cent. Products cut from land bearing trees more than 10 years old 

 at the time of classification are taxed at a progressive rate, increasing 

 from 2 percent during the first 10 years of classification to 7 percent 

 after 50 years. 



In Minnesota a uniform tax of 10 percent of stumpage value is 

 levied on timber not merchantable at the time of classification ; timber 

 merchantable at that time is taxed separately. The tax on such tim- 

 ber starts at 40 percent of stumpage value if cut within the first year 

 of classification and is reduced by 2 percent a year for timber cut 

 thereafter until it reaches 10 percent, after which it remains constant. 

 This provision with its unusual regressive feature represents a com- 

 promise with the counties when the law was amended in 1947 to 

 remove the merchantable timber on classified land from taxation 

 under the general law. The provision is not in the interests of good 

 forestry. It tends to encourage postponement of the cutting of ma- 

 ture timber which for silvicultural and economic reasons should be 

 harvested promptly. 



The objective of a progressively graduated tax schedule presumably 

 is to provide some relief to an owner who has paid property taxes 

 on his timber while it was reaching financial maturity and who, in 

 entering it for classification, has become subject to the yield tax. 



