Timber is the only commodity in the state that is taxed at harvest. Georgia tree farmers highlight the need for equity.
By John Casey
Over the past several decades, the State of Georgia has maintained a steadfast commitment to sound legislative policies, particularly in the area of fiscal responsibility. Given Georgia’s status as the nation’s top state for both business and forestry, legislators and state executive leadership have worked diligently to reduce the government’s fiscal burden on local industries and landowners — but in the realm of forestry, there remain significant challenges that the Georgia Forestry Association is working to overcome.
Most strikingly, timber faces a distinctive challenge as the only agricultural or mining commodity subject to a harvest tax in the state. In addition, the burden of that harvest tax is assessed at 100% of the fair market value of the harvested timber, a stark contrast to the 40% assessment applied to other real properties such as homes, buildings and land.
The impact of this policy is profound, putting tremendous financial stress on private landowners across the state, considering that they are still obligated to pay annual ad valorem taxes on their land as well as state and federal tax on the income from each timber sale. Entering the 2023 legislative session, the Georgia Forestry Association looks to bring more fairness and equality to the taxation of harvested trees on behalf of the hardworking, dedicated people who steward our state’s forests. House Resolution 96, sponsored by Rep. Noel Williams (R-Cordele), was introduced during the 2023 Session of the Georgia General Assembly and passed by the House of Representatives. This year, the Senate will pick up debate on the legislation, which is aimed at reducing the tax assessment rate from 100% of fair market value to 40% of fair market value. The change will support tree farmers across the state by reducing their ad valorem tax burden and encouraging investment in reforestation and long-term management of the land.
Richard Curtis Greene County
Pinned between three rapidly developing counties, Richard Curtis is concerned about the future of his family farm. The growth of Athens to the north, Madison to the west, and Oconee to the south has sent their tax assessments skyrocketing, with some of the tracts increasing in value by three times in just a decade. He’s grateful for the tax reprieve he receives through the state’s Qualified Timberland Program (QTP), but it’s not enough to offset additional tax burdens, particularly the state harvest tax. As he looks at the numbers, he fears that soon his only option will be to sell, likely to developers who will parcel out and build on the property.
“It’s totally unfair that we are the only ones whose property is assessed at 100% of value. That money could pay for a good portion of replanting the land,” said Curtis. “We’re at the point where the valuation on the land is so much that we can’t grow timber on it and justify it. At some point in time, we’re going to have to sell it because there just isn’t enough income coming off of it from the sale of timber and recreation.”
According to data from the U.S. Forest Service, Georgia loses 118,000 acres of forestland annually due to urban sprawl. As he begins to plan future harvests, Curtis is now factoring in whether or not he will replant, weighing the burden of the harvest tax and additional management costs. “Without QTP, we couldn’t afford to pay the tax and live on it as income too. Now we’re at a point where even with it, it’s hard to make sense of holding onto the land after harvest because of the tax we take on when we do,” said Curtis. “I’m not sure for how long, but if they fix it, we can at least hold on to it for a while longer.”
Jamie Jordan Floyd County
Raised in a family of row croppers, Jamie Jordan has known the world of agriculture since birth. Growing up, he took the time to learn all the tools of the agriculture and forestry industry, spending time not only on his family farm but also working in nearby operations and learning about the industry at Berry College.
In the 1980s, he decided he wanted to branch out from the family tradition of row cropping and work with his brother to start a forestry operation in Armuchee, GA.
At first, they started by hand-planting the trees, then began outsourcing that labor before renting heavier equipment from the Georgia Forestry Commission. It was hard work that was met with many unplanned learning experiences. After several decades of tending the forest, he recently harvested his first 300 acres of timber — only to learn that harvesting timber, despite timber being an agricultural product, is much different than harvesting row crops financially.
“When we sell cotton, corn, soybeans and wheat, we don’t pay harvest tax like we do on timber. Timber to me is agriculture,” said Jordan.
And that timber, unlike row crops, is assessed at 100% of its value versus the 40% that all other real property is assessed in the state. As Jordan prepares to reforest the land this year, he knows it won’t be him, but instead his children who must plan for the next harvest. He also knows that planning can be tricky, given unforeseeable circumstances decades away, and hopes that state leaders can at least bring down the tax burden to help. “It would help a pretty good lick to have that 60% back. When you consider the cost of the cruising and reforestation, it’s tremendous. When you look at it over 35 years, there’s really not a lot left when you pay taxes,” said Jordan. “Then factor in that we can’t predict the markets 35 years out, we’re really at the mercy of the market. The land costs and the costs of the timber, we don’t know where it will be or how much we can realistically make off of it.”
Terry Easley Jeff Davis County
While he’s only actively managed his land for three years, Terry Easley has quickly learned that Georgia’s harvest tax can be a financial drain for forestry operations. Easley has owned his 195-acre property since 1997, actively operating only 45 acres of the property as row crop land until he made the decision to harvest timber on a 111- acre tract in 2020.
To prepare the property for planting and reforestation, he began harvesting the few suitable trees and chipping the rest. Come the end of the year, he found himself stunned when he received three tax bills for the harvest.
“I got a tax bill from the county for the harvest tax of the trees, plus one from the state and one from the federal government for income tax,” said Easley. “I don’t understand how they can tax you so many times on a harvest, let alone at all before it even makes you any money.”
Those bills made a dent in his future planning for the operation. He now must assess how he should juggle the costs of the sustainable management of the forest.
“Unlike with income tax, you can’t write off any of those costs that it takes to take care of the forest against the harvest tax,” said Easley. “The amount they’re taking, that could be used to properly reforest the land and manage the forest sustainably. Now I have to decide what I can or can’t do.”
Easley is currently in the process of replanting the tract, with hopes to finish by February of this year. As he considers the future burden of taxation on his next generation, who will reap the benefits of the next harvest, he hopes that Georgia leaders will rectify the issue so that he and his children can properly steward the land. ■ John Casey is a strategic communications professional who supports clients through the art of storytelling. In his downtime, John can be found hunting and fishing on his family’s centennial farm in Northwest Georgia.
Georgia Forestry Magazine is published by HL Strategy, an integrated marketing and communications firm focused on our nation's biggest challenges and opportunities. Learn more at hlstrategy.com