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Resources for Tree Farmers

Taxes

Private forests are critical for safeguarding the air we breathe, the water we drink, the sky we see, the wildlife we love, and the inspiration we desire. Of the 751 million acres for forestland, more than half (56 percent) is managed privately and of that, individuals or families own 251 million acres (62 percent). Too often, these private forests are put at risk as owners may be forced to sell in order to pay property, estate or other taxes.

ATFS supports tax policies that encourage sustainable management of family forests and that recognize the important societal benefits family forests provide. Tax policies should encourage family ownership and adoption of sound forest management practices. Overall, tax policies should create a positive environment for keeping forests as working forests–providing clean air, clean water, wildlife and recreational opportunities in their communities.

 Learn more about AFF's policy on taxes and family forest.

 Recommendations

Tax issues affecting family forest owners exist at all levels of government—federal, state and local.  Often, the interplay of these different policies and their combined effects can exacerbate the challenges facing family forest owners.

  • Reduce the Estate Tax Burden on Family Forests
    Estate taxes can also profoundly impact family-owned forests. Currently, 15 percent of America's forests are owned by someone 75 years or older, accounting for millions of acres of forest land.  Because most of America's family forest owners are "land rich and cash poor",  the estate tax burden forces families to sell part or all of the property or pre-maturely or unsustainably harvest their timber to pay the tax. Learn more about the Keep the Forest in the Family campaign.
  • Create a Favorable Income Tax Environment
    Tax policy can serve as either a major incentive or a major deterrent to family forest owners who wish to keep their land in the family and manage their forests sustainably from generation to generation. There are many ways Congress can incentivize forest owners with tax policy; from increasing allowable annual deductions for reforestations, to reducing capital gains rates to below 20%, and reinstating income averaging for family forest owners with an exemption similar to farmers and fisherman.
  • Think About the Long-Term with Tax Incentives for Conservation Easements
    Forest land is a unique and risky, investment, often requiring significant upfront expenditures that can take decades to yield favorable returns. Tax policy that does not reflect the nature of this long-term investment can lead to pre-mature timber harvesting, low reforestation rates, and conversion of forests to non-forest uses.  Family forest owners are especially susceptible to these pressures, because they often lack the capital to invest in such long-term investments that see infrequent returns. With permanent or extended tax incentives for conservation easements, including through use of tax credit bonding programs, Congress can help forest owners maintain their woodland for the long-term.
  • Include Family Forests in Endangered Species Conservation
    Tax incentives exist for endangered species conservation on farms and ranches. However, 60 percent of at-risk wildlife depends on private forests for habitat. In some watershed areas, 95 percent of at risk species occur only in private forests. Therefore, these incentives should be extended to family-owned forests as well.

 

More information is available in the AFF Board approved policy brief.