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First approximation: break-even formula
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Article Content |
Break-even (B-E) formula
| Property tax deferred annually ($) |
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= Annual break-even volume (MBF) |
| Severance tax rate ($/MBF) |
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Example
| $600 |
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= 154.24 MBF |
| $3.89/MBF |
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Conclusion for example:
- If harvesting more than 154 MBF/year, choose forestland program.
- If harvesting less than 154 MBF/year, choose STF option.
Assumption to make B-E formula work
- Must harvest the same amount annually.
MBF = thousand board foot.
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