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First approximation: break-even formula
Break-even (B-E) formula
 
Property tax deferred annually ($)    

  = Annual break-even volume (MBF)
Severance tax rate ($/MBF)    
 
 
Example
 
$600    

  = 154.24 MBF
$3.89/MBF    
 
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.