Annual Forest Tax Law Program Harvest Tax Rates

Annually, the Department of Natural Resources (DNR), Division of Forestry Tax Law Section gathers stumpage values paid on privately-owned timber sales from lands enrolled in the Managed Forest Law and the Forest Crop Law programs throughout Wisconsin. Stumpage values are reported mainly by private-sector Cooperating Foresters with additional values reported by DNR Foresters. The stumpage values gathered indicate the value of standing timber on those specific stands at time of harvest.

With the passage of Act 358, the collection of yield taxes on MFL timber sales, and severance taxes on FCL timber sales was abolished.
The Department will continue to calculate annual stumpage values for use in the assessment of MFL withdrawal taxes in some limited circumstances and for determining penalty amounts for cutting merchantable timber in violation of s. 77.86 (and s. 77.06) Wis. Stats.

Calculating average stumpage values annually is a requirement of state law as described in s.77.91(1), Wis. Stats., which provides: “STUMPAGE VALUES. Each year the department shall establish reasonable stumpage values for the merchantable timber grown in the
municipalities in which managed forest land is located. If the department finds that stumpage values vary in different parts of the state, it may establish different zones and specify the stumpage value for each zone. The stumpage value shall take effect on November 1 of each year. Notwithstanding s. 227.11, the department may not promulgate or have in effect rules that established stumpage values.”

The following are shown for purposes of consideration and reference:
• 2018 Preliminary Stumpage Rates for review and comment
• 2017 Final Stumpage Rates currently in effect until October 31, 2017 for reference
• The statewide zone map showing the 13 separate harvest tax zones for reference

Rates shown in both the 2018 Preliminary Rates, and the 2017 Final Rates are calculated weighted 3-year averages. The individual values are not reflections of current market stumpage pricing, and are not intended for use in timber product valuations. The final stumpage rates calculated, following any adjustments from the comment period, are those that will be used to determine MFL and FCL withdrawal taxes and penalty
amounts, for assessment in limited applications for the period beginning November 1, 2017 through October 31, 2018.

The final tax rates will be posted on the DNR website.  Once the calculated tax rates are established, no further changes will be made until November 1, 2018. As such, it is important to take time to review and comment during this public comment period. Additionally, please keep in mind that the stumpage rates are based on raw data. If submitting comments, please provide factual data to support any requested changes. Changes can only be considered if actual stumpage data is included. Anecdotal comments will be reviewed, but cannot be used to modify the 2018 stumpage rates and subsequent tax rates.

If you have any comments related to the preliminary 2018 stumpage rates or questions, please contact Jeff Simon at no later than November 22, 2017.

This document is a draft guidance document. This document does not contain any mandatory requirements except where requirements found in statute or administrative rule are referenced. This guidance does not establish or affect legal rights or obligations and is not finally determinative of any of the issues addressed. It does not create any rights enforceable by any party in litigation with the State of Wisconsin or the Department of
Natural Resources. Any regulatory decisions made by the Department of Natural Resources in any matter addressed by this guidance will be made by applying the governing statutes and administrative rules to the relevant facts.