Text Size:   A+ A- A   •   Text Only
Find     
Site Image
Small tract forestland program
ORS 321.700-754


Purpose

Legislated in 2003 and initiated in 2004, the small tract forestland (STF) program is an optional program to the forestland program. It was developed to accommodate the varying needs of small woodland owners. This program allows the landowner to delay paying part of their annual property taxes until after the landowner harvests timber.

 

How the program works
Like the forestland program, the STF program applies to land classified by the county as either "highest and best use" forestland or "designated" forestland.

 
A landowner pays an annual property tax on 20 percent of the forestland special assessment value. To account for the annual property tax reduction, an STF severance tax is paid when the landowner harvests the timber from this property.
 

How to get into the STF program
Apply to the
assessor in the county in which the land is located. In the case where land was not previously classified as forestland, you will need to complete two applications, the Application for Designation of Land as Forestland and the Application for Small Tract Forestland.
 
Once your property qualifies for the STF program, you cannot remove it until you sell the property or transfer it to a new owner.
 

Ownership size
You must own at least 10 acres of forestland but less than 5,000 acres within the state.

 
You may choose to put any of your tax lots into this option; however, you must include all land you own that is contiguous to the tax lot under application. The determination of contiguous property includes owning the land as an individual and/or owning the property through an entity in which you have a majority interest.

 

Forestland criteria
The land must contain enough trees to meet the stocking standards of the Oregon Forest Practices Act. If your land does not currently meet these standards, you can still qualify if at least 20 percent (minimum of two acres) of the land meets the standards by December 31 of the first year in the program and there is a written management plan to plant enough trees to meet the standards within five years. Lands that are not adequately stocked (20 percent of the area each year) within five years will be disqualified.

 

Annual property tax
Land under this program is taxed at 20 percent of the special assessment value, which is based upon the typical price paid for land managed for the production of harvestable timber.

 

Severance tax at harvest
The
STF severance tax applies to timber harvested from lands classified under the STF program.
 
The tax rates are intended to recover the unpaid property tax projected over a typical rotation length for an average productivity class. 
 
The tax rates are indexed annually at the rate that the specially assessed forestland has increased or decreased from one year to the next.
 

Disqualification or removal
The county assessor may disqualify lands that do not continue to meet the standards for this program. The owner of the disqualified lands will be required to pay an additional tax assessment. Once you are disqualified from the STF Program you may not get back into the program for five years. Further, if the STF property is sold or transferred, the new owner may apply for STF designation, otherwise they will be liable for the additional tax assessment. The additional assessment for the STF Program is a three-step calculation:

  1. The difference between the tax paid under the STF Program and the tax that would have been paid under the Forestland Program for the number of years the property has been in the STF Option, up to a maximum of 10 years.
  2. The difference between the taxes that would have been paid under the Forestland Program for the previous five years and the tax that would have been paid for the same five-year period had the land been taxed at the real market value. (The number of years calculated would be the lesser of the number of consecutive years the land was forestland or five years.)
  3. The additional assessment is the sum of the amounts calculated from step 1 and step 2.

Example of additional tax assessment for 50-acre tract of land:
Tax rate = 1 percent
Forestland assessment = $300
STF assessment = $60
Real market assessment = $3,000
 
Step 1
Forestland program:
10 years x 50 acres x $300/acre x 1% 
$1,500
STF program:
10 years x 50 acres x $60/acre x 1%   
-$300
Additional tax assessment
  $1,200
                      

Step 2
Real market value:
5 years x 50 acres x $3,000/acre x 1% 
$7,500
Forestland program:
5 years x 50 acres x $300/acre x 1%
-$750
Additional tax assessment
  $6,750
 
                    
Step 3
Total additional tax assessment (Sum $1,200 plus $6,750)
$7,950



Links: 
 
Forestland values
Western Oregon forestland productivity classes
Choosing a forestland program
Application for Designation of Land as Forestland
Application for STF Program