Referendum Lets Georgia Voters Choose on Tax Exemption for Forestry Equipment
By Matt Hestad
Georgia’s logging, land management and reforestation businesses represent a key part of the state’s leadership as the number-one forestry state in the nation.
They are the gears that keep our forest economy moving by harvesting trees and delivering them to mills, managing forest roads and bridges, and preparing the land for seedlings to be sown across the state. Without the success of these businesses, our state’s mills would be without a sustainable source of wood and our forest landowners would be left without a way to monetize their timber so they can sustainably manage their forest land.
Unfortunately, these small businesses are becoming increasingly vulnerable to inflationary cost increases, a shortage of skilled labor and unique operational challenges.
That’s why the Georgia Forestry Association (GFA) is kicking off a campaign to support a statewide referendum that will ask Georgia voters on the November General Election Ballot to approve an ad valorem tax exemption for forestry equipment.
If passed, this important provision will deliver much-needed economic relief for the sector — in the form of an exemption that has been enjoyed by agricultural equipment owners for more than 20 years.
In September 2021, GFA conducted a survey of its Board of Directors, asking them to rank issues impacting the forestry community by level of importance. The survey highlighted the vulnerability of the harvest and haul sector, with 69% of respondents putting labor for harvesting, labor for trucking, insurance for trucking and ad valorem tax for forestry equipment in their top five issues of highest priority.
GFA President and CEO Andres Villegas said that these survey results heavily influenced the development of the GFA’s policy priorities going into the 2022 Legislative Session.
“Supply chain issues, which consumers are feeling every day, are playing out on the state level with a shortage of truck drivers in the face of increased demand for wood products and other commodities. These issues are compounded in Georgia, which has the lowest hauling weights in the southeast and some of the highest tax and insurance rates,” Villegas said. “Our advocacy efforts at the state level this year have been focused on developing policy to deliver relief to this sector, which is most vulnerable to economic factors that are outside of its control.”
During the 2022 Legislative Session, the GFA championed House Bill 997, sponsored by Rep. Sam Watson (R-Moultrie), which provides an ad valorem tax exemption for owners of equipment used for forestry, logging, site preparation or reforestation.
This exemption has been enjoyed by owners of farm/agricultural equipment since the passage of a statewide referendum in 2000; however, owners of forestry equipment were not included at that time.
HB 997 passed both chambers of the General Assembly with bipartisan support and will now head to the November General Election Ballot, where voters will decide whether it should fully pass.
“It’s really about fairness,” said Rep. Watson. “We all depend on foresters and farmers for our survival and progress, [so] it makes sense that forestry equipment should receive the same tax treatment that agricultural equipment currently receives. I am proud to support this bill and look forward to its passage in November.”
Perspectives from Small Forestry & Logging Business Owners Justin Justice JUSTICE ENTERPRISES, INC. DOUGLAS, GA Justin is a fifth-generation logger based in Douglas, GA. He and his father Mike formed Justice Enterprises in 2001, and currently operate three logging crews: a large roundwood crew, a chipping crew and a smaller crew that focuses on special projects for the bigger landowners in the area. Justin said the margin for profitability in the logging business is causing many people to go out of business.
“In the last two years, it feels like we have to haul twice the wood to make the same money. Costs for tires, equipment and fuel are through the roof, and insurance for our logging trucks is almost unbearable. On top of all that, it is getting harder and harder to find people who will show up to work every day. This ad valorem tax exemption would be a big deal for us, and I am just thankful for the support of the GFA and the General Assembly for recognizing the issue.”
Tobey McDowell C. MCDOWELL LOGGING JACKSON, GA Tobey started in the forestry industry as a log truck driver when he was 18 years old. Over his 25-year career, he has built up his business to include two logging crews and a chipping crew that operate across the piedmont region in the state. In total, Tobey’s business employs 15 people, including drivers for the five logging trucks that he owns and operates. Tobey is proud of the business he built, and his biggest motivation for staying in business through this economic crisis is to continue supporting his employees.
“When you add on all the additional cost increases that we have seen with fuel, insurance, wages and materials, it has gotten to a point where I am just thankful to break even. I’ve got 15 guys whose families are depending on this business to stay profitable, and that is the only reason I am still in business.
It takes eight to 10 pieces of equipment, including the trucks and trailers, for us to run just one logging crew, and the overall costs for that equipment are increasing every day. So, when you consider the tax bill on our equipment, it determines whether we purchase new equipment, keep running old equipment or just give up all together. So, right now any break we can get will help.” ■ Matt Hestad is the vice president of engagement for the Georgia Forestry Association.
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