FOREST YIELD TAXES 25 



is the difference between the amount that would have been paid under 

 the general laws and the amount actually paid while the land was 

 classified, with interest at 5 percent. Wisconsin imposes the yield tax 

 on standing timber values at the expiration of a contract. Missouri 

 imposes no declassification tax when a contract expires. Land and 

 timber simply go back under the general property tax. 



In the 12 States which impose a tax when land is declassified by 

 public action there is a greater tendency to measure the amount due 

 by the difference between taxes actually paid and taxes that would have 

 been paid if the land and timber had. not been classified. Six States 

 use this method. In some the assessor must keep a record of taxes that 

 would have been paid under the general property tax. In others this 

 measure is based on the amount paid by similar lands not classified. 

 Interest is charged on the difference in taxes or on the amount of the 

 general property tax by Idaho, Louisiana, Minnesota, Oregon, and 

 Wisconsin. Rates vary from 5 to 10 percent. Washington is the only 

 State which does not charge interest. 



.b our States — Alabama, Massachusetts, Michigan, and New York — 

 impose the yield tax on the value of the standing timber at the time it is 

 declassified by public action. Michigan imposes an additional charge 

 of 3 cents an acre for each year the land was classified, but not for 

 more than 20 years. In Connecticut the declassification tax is at the 

 rate of 5 mills per annum on the difference between the assessed value 

 when declassified and the assessed value when classified, in addition to 

 taxes paid during the period of classification. Missouri charges the 

 amount paid by the State as reimbursement to the local government 

 units in addition to any land or yield tax paid in. Land declassified 

 by State action in Wisconsin within the first 5 years is taxed by an 

 amount equal to the sums paid by the State to the town on the land in 

 question with interest, less any yield tax paid. Land declassified 

 after 5 years, as already explained, is taxed according to the difference 

 between taxes on classified and unclassified land. 



The imposition of a declassification tax is clearly justified. Without 

 it an owner who is not practicing forestry would obtain a greater tax 

 concession than the owner who practices forestry and keeps his lands 

 classified. If the purpose of the declassification tax is simply to 

 recover the amounts that would have been paid in the absence of 

 classification, the taxes based on this measure accomplish the purpose. 

 One feature of this procedure which tends to make the law unpopular 

 with the local governments is the necessity in some States of keeping a 

 record of assessed values and tax rates for all classified properties. 



The assessment of the yield tax against the value of standing timber 

 at the time of declassification does not provide a tax equal to revenues 

 lost. For young stands below merchantable age there would be little 

 or no tax. For heavily stocked stands of merchantable timber the 

 tax might be in the nature of a penalty, far in excess of the benefits 

 to the owner from the exemption of timber from the property tax for 

 a relatively short period. It is peculiar that this tax is used more 

 in cases of voluntary withdrawal than in the cases of declassification 

 resulting from noncompliance with provision of the law or contract. 



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