Property Tax Exemption for Forestland

LANSING, March 19, 2010 - Newly introduced legislation in the state House would bring forestland up to par with farmland on tax rolls and help grow Michigan's timber industry. 
House Bill 5924 introduced by Rep. Brian Calley (R-Portland) would classify privately owned forestland as agricultural property, making these parcels also eligible for an 18-mill agricultural property tax exemption. But to qualify, the land must have a forest management plan. The bill also clarifies that land enrolled in a federal conservation program is eligible for the same tax exemption.
For more than a decade, Michigan Farm Bureau (MFB) policy has called for privately-owned forestland to be treated the same as cropland.
"Forestland and woodlots dot many farm landscapes in Michigan. Although the land cannot be farmed for traditional agricultural products, in many cases it can be farmed for timber, another sector of Michigan's agriculture industry," said Rebecca Park, MFB association legislative counsel. 
"So forestland and woodlots deserve to be classified as agricultural property and also made eligible for the 18-mill agricultural property tax exemption," said Park.
"It makes perfect sense but requires legislative action. So we appreciate Representative Calley's leadership on this longtime goal of Farm Bureau members."
Key to Calley's bill is the provision that the forestland have a forest management plan covering timber harvest, forest regeneration, environmental safeguards, and so forth.
"Just as farmland must meet specific criteria to qualify for the existing 18-mill agricultural property tax exemption, this bill provides a system of checks and balances for forestland," said Park. 
It's expected the tax benefit will be an incentive for more landowners to develop forest management plans which, in turn, could help spur Michigan's timber industry.
"This has the potential to open more private forestland for use in Michigan's timber, wood products and paper industries, while also providing stable sources of local resources," said Park.
The bill has been referred to the House Tax Policy Committee.