FOREST YIELD TAXES 11 



assessed at only a fraction of its true value. The practice of raising 

 assessments on nonforest property has been applied, particularly to 

 farm forest owners. It has also been applied to the forest landowner 

 who has a manufacturing plant in the same tax jurisdiction. The 

 only person to whom it could not be applied is the owner who has no 

 property in the taxing jurisdiction other than his classified forest 

 land. 



The attitude of State officials charged with the administration of 

 the yield-tax law may also discourage classification. The failure of 

 many of these officials to give adequate publicity to the yield-tax pro- 

 visions has been noted above. State boards and commissions are not 

 always adequately staffed or financed to administer the yield-tax law, 

 and this may result in their opposition to the classification of small 

 holdings. The classification of a small holding requires hearings, 

 inspections, records, and collections the same as for a large one. The 

 revenue returns are negligible and the total area brought under im- 

 proved forest practices is not great. Some State officials have adopted 

 the attitude that the small holdings will soon pass into the ownership 

 of larger companies and that the proper time for classification will 

 be when these holdings are consolidated into larger ownerships and 

 managed for timber production. 



Eligibility requirements. — Many forest lands are not classified under 

 yield-tax laws because they fail to meet the eligibility requirements 

 established by the laws. Some States have denied the privilege of 

 classification to tracts less than 5, 10, or 15 acres in area, but the mini- 

 mum acreage established by the majority of States having such a 

 limit is 40 acres. The average size of all private holdings of com- 

 mercial forest land in the United States is 82 acres. The average size 

 for the small holdings under 5,000 acres which make up 75 percent 

 of the total privately owned acreage in the United States is only 62 

 acres. It is apparent that a considerable acreage is ineligible for 

 classification simply because the individual tracts are not larg* enough 

 to qualify. 



Four States establish maximum values for land or for land and 

 timber as a means of excluding from classification holdings that may 

 contain an excessive amount of merchantable timber or that may have 

 greater values for purposes other than for forestry. Seven States limit 

 eligible entries on the basis of merchantable timber and will not 

 classify holdings that have mature timber in merchantable quantities. 



Forest land may also be ineligible for classification because it is 

 not used primarily for forestry purposes. Some States will not 

 classify lands used for grazing purposes or if grazing is destructive. 

 Many owners who have the option of classifying their land have not 

 used it because they intended to use the land for grazing, to develop 

 it for resort purposes, to clear it for farming, or to offer it for sale. 



Absence of tax advantage. — If an owner's lands are eligible for 

 classification under an optional yield-tax law and if all other condi- 

 tions are favorable to classification, the owner may still prefer to keep 

 his lands under the general property tax because he finds no financial 

 advantage in having them classified under a yield-tax law. Some- 

 times this situation will result because his holdings contain timber that 

 is merchantable or that soon will become merchantable. This timber 

 may be seed trees left after harvest, it may be logs and trees that can 



