Forest Taxation

The timber industry already pays a higher tax burden than other businesses in Oregon

A recent independent analysis done by nationally recognized economics and accounting firm Ernst & Young concluded that as a function of gross value added (i.e. output minus costs), the forest products sector pays an aggregate tax rate that is, on average:

• 1.5 times more than other Oregon business sectors
• 2 times more than the manufacturing sector
• Over 1.25 times more than the agriculture sector
• 3 times more for fire protection than Washington landowners

Keeping forests as forests is in the best interest of all Oregonians

While timber is more than just a crop – forests provide a host of social and environmental benefits other crops do not – it is taxed just like every other crop in Oregon. As is the case with hazelnuts, when trees are harvested, processed, and sold, income is generated and taxed. Up-front costs (planting, thinning, pest and fire prevention) aren’t recouped for 40 years or more, provided trees aren’t destroyed by mother nature before then.

Similarly, forest landowners are taxed just like all other landowners in Oregon. Forestland is taxed at its real market value: as land primarily used to grown and harvest timber, just like agriculture land is taxed as its use for growing crops and residential and commercial property is taxed accordingly.

Thanks to state policy that prioritizes maintaining forestland, Oregon has the same amount of forestland now as we did 100 years ago.

Reinstating a severance tax encourages conversion of forestland to other uses (residential, industrial, agricultural) that do not provide environmental benefits like carbon capture and storage, wildlife habitat, clean water, and recreation.

Severance taxes are for “severed resources” like coal and crude oil, not a crop that is planted and cultivated over time. State law requires harvested timber be replanted – on average four trees are planted for every one that is harvested.

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