MINNESOTA 
Yield Tax!. 
Optional. Enacted 1927. Amended 1929, 1945, 1947, 1949, 
1953, 1955, 1957, 1959, 1961, and 1963. 
Statutes 1964, Ch. 88, Sees. 88.01, 88.47 to .53. 
Classification 
Qualification. Tracts of not less than 35 acres 
generally suitable for the planting, culture, and 
growth of trees for the production of timber or 
forest products may be classified as ‘auxiliary 
forests.’”? Woodlots containing not less than 5 nor 
more than 40 acres and protected by owner or 
tenant actually living on or adjacent thereto may 
also be classified. 
Procedure. The owner makes application to the 
county board giving a description of the property, 
the estimated value per acre, suitability for the 
production of forest products, the kinds of timber 
growing and proposed to be grown, and methods 
of timber culture to be followed. The county board 
determines suitability for classification and for- 
wards applications that have been accepted to 
the Director of the Division of Forestry. The Com- 
missioner of Conservation must then approve or 
disapprove the application within 90 days. 
Following approval, the applicant must furnish 
an abstract of title for the property and evidence 
that there are no unpaid taxes thereon. 
A contract is next entered into between the 
owner and the State specifying among other things 
the forestry measures to be undertaken, uses 
which may be made of the land during ~lassifica- 
tion, and how land and timber are to be taxed. 
Contracts may extend for terms up to 50 years, 
subject to renewal for not exceeding an additional 
50 years, and are deemed to be covenants running 
with the land. Contracts are recorded by the 
Register of Deeds at the expense of the owner. 
Provisions of law enacted subsequent to the 
execution of the contract may be incorporated by 
supplemental agreement upon application of the 
owner and approval of the county board and the 
Commissioner of Conservation. 
Conditions governing continued classification. 
The owner must faithfully perform the provisions 
of the contract and the Director makes periodic 
Inspections to determine whether contract and 
statutory requirements are being met. Classified 
lands remain open as public hunting and fishing 
grounds. 
Declassification 
This may be effected (1) by request of the owner 
at the discretion of the Commissioner or (2) by 
action of the Commissioner upon determination 
that terms of the contract have not been observed. 
In either case the property is liable for all taxes 
and assessments that would otherwise have been 
levied during the period of classification, less 
annual taxes actually paid, together with interest 
at 6 percent. 
' Known as the ‘“‘Auxiliary Forest Tax.” 
40 
In lieu of cancellation by the Commissioner the 
latter may carry out the terms of the contract at 
public expense. Such costs are assessed against 
the property and bear interest at 6 percent. 
Upon expiration of the contract period, a yield 
tax is payable upon any merchantable timber 
remaining on the property. 
The Commissioner shall cancel any contract 
if the owner has made successful application under 
the Tree Growth Tax Law (see Modified Rate Law, 
p. 26), and adjustment of taxes has been made as 
provided. 
Tax treatment 
Land. The land, exclusive of mineral or other 
sub-surface values, is subject to an annual tax of 
10 cents per acre. Sub-surface values are taxed 
separately. 
Timber. A yield tax, assessed in either of 2 ways, 
is payable upon merchantable timber. Under the 
first method the tax is levied when the timber is 
harvested. The tax amounts to 40 percent of 
stumpage value upon timber cut within 1 year 
after March 31 following date of classification. 
The rate is reduced by 2 percent on each April 
1st following until it reaches 10 percent, after 
which it remains constant. 
Under the alternative method of assessment 
available upon application by the owner and 
approval by the county board, a tax of 10 percent 
is payable each year on the annual timber growth 
determined as outlined below. 
Exemption. Timber used by the owner for fuel, 
fencing, or building on land occupied by him, which 
is within or contiguous to the auxiliary forest, 
is exempt. The owner must however file a state- 
ment with the county auditor prior to cutting 
showing the quantity to be cut and the purposes 
for which it will be used. 
Classified lands are subject to special assess- 
ment for public improvements only with the con- 
sent of the owner. 
Tax administration 
Reports. Before harvesting merchantable timber 
the owner must request examination of the timber 
by the Commissioner of Conservation. The latter 
designates the kind and volume of timber that 
may be cut and files a copy of his report with the 
county auditor. Before removal of timber the 
owner must provide security amounting to not 
less than 150 percent of the yield tax payable. A 
cutting permit is then issued. : 
The owner files an annual report in duplicate 
with the Director specifying the quantity and 
value of timber harvested by species and kind of 
product as shown by scale or other measurement 
