| How Timber is Taxed in Oregon |
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At one time, Oregon taxed timber through the property tax system. The tax system considered timber as real property and taxed it the same way as other real property. The 1993 Legislature determined that timber is more like an agriculture crop than real property. Currently, the only "property tax" related timber tax is the Small Tract Forestland (STF) Severance Tax. This tax provides for the repayment of property taxes that were delayed until harvest through the STF Option. Only those landowners who have chosen the STF Option need to pay the STF Severance Tax.
The STF Severance Tax receipts are distributed to the State School Fund, the Community College Support Fund, and the counties that have lands classified under the STF Option. The State School Fund and Community College Support Fund receipts are distributed on or before May 15 of each year. Receipts for the counties are distributed on or before August 15 of each year.
Learn more about this tax at the STF Severance Tax link.
The Forest Products Harvest Tax (FPHT) was established to recover portions of the state´s costs associated with:
- Administration of Oregon´s Forest Practices Act,
- Development of forestry research through Oregon State University,
- Establishment of the Oregon Forestland Protection Fund, and
- The Oregon Forest Resources Institute.
The Oregon Forest Practices Act encourages forest management that protects forest resources including soil, air, water, and fish and wildlife resources. It also helps preserve scenic resources along visually sensitive corridors and reduces the risk of serious bodily injury or death caused by shallow, rapidly moving landslides directly related to poor forest practices. Currently, the FPHT covers 40 percent of the cost of administering this law. The state General Fund pays the other 60 percent.
Oregon State University supports forestland owners in Oregon by providing forestry research through the Oregon Forest Research Laboratory (FRL). The FPHT receipts provide approximately 10 percent of research budget for the FRL.
The Oregon Forestland Protection Fund serves as kind of an "insurance policy" against wildland fires that are beyond the capability of the local district fire protection forces. The FPHT receipts provide 50 percent of the budget for this fund. The state General Fund pays the other 50 percent.
The Oregon Forest Resources Institute (OFRI) was created in 1991 to improve public understanding of the state´s forest resources. OFRI provides information on Oregon´s forest practices and encourages sound forest management. The institute is 100 percent funded by the Forest Products Harvest Tax.
You can learn more about this tax at the Forest Products Harvest Tax link.
Last revised February 16, 2005.
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