Maine Tree Growth Tax Law
The Maine Legislature passed the Tree Growth Tax Law in 1972 to help Maine landowners maintain their property as productive woodlands, where timber is harvested periodically, when they choose. “ It is declared to be the public policy of this State that the public interest would be best served by encouraging forest landowners to retain and improve their holdings of forest lands upon the tax rolls of the State and to promote better forest management by appropriate tax measures in order to protect this unique economic and recreational resource.” (36 MRSA §572) Current use taxation of forest land may be the most important action state government can take to support the many public values derived from maintaining productive and well-managed forest land, including clean air and water, wildlife habitat, and recreational opportunities.
If the choices you've made in your Forest Management Plan are designed to realize the value of your timber, and meet other goals, through well-planned harvests over time, your property may be eligible for enrollment. You should be sure you understand all of the benefits of Maine's Tree Growth Tax Law, as well as the penalties for removing your land from the program.
This law provides for the valuation of land which has been classified as forest land on the basis of productivity value, rather than on fair market value. This law is based on Article IX, section 8 of the Maine Constitution which permits such valuation of forest lands for property tax purposes. If you enter this program, you attest that your land is being used primarily for growth of trees to be harvested for commercial use at some future time. Land that you have other plans for can be kept out of the program.
Save money and enroll today!!
How Does It Work?
Each town places a value on each acre of forestland that you own. This is partially based on the average selling prices for land in your area. In northern Maine, the value is $300 to $500 an acre and $500 an acre is the most common number being used by towns. If you own a 200 acre woodlot, the total value assessed value would be $100,000 at $500 an acre. On a woodlot, there are areas that are not suited for growing forest products and are not taxed as woodland under the Tree Growth Tax Law program. Roads, streams, ledge, wetlands, and open swamp are examples of areas that are documented and are taxed differently, usually less. The state values the forest land from a productivity stand point. An example of the tax breakdown and savings is shown below using a woodlot with 200 wooded acres in the town of Eagle Lake.
Example: Eagle Lake: Woodland valuation for the town is $500.00 an acre if you own more than 10 acres. The 200 acre woodlot is valued at $100,000. The mill rate is .1845 ($18.45 per $1000 of valuation). $100,000 X 15.45 = $1545 (tax).
The state values woodland in Aroostook County for 2015 as follows:
Hardwood - $155/ac
Mixed Wood - $134/ac
Softwood - $120/ac
200 Acre Eagle Lake Woodlot Timber Breakdown
Hardwood: 100 acres
Mixed wood: 50 acres
Softwood: 50 acres
Total acres: 200
State Valuation
Hardwood: 100 ac X 155 = $15,500
Mixed wood: 50 ac X 134= $6700
Softwood: 100 ac X 120 = $12000
Total Value: $34,200
$34,200 X 15.45 = $528.39 (tax)
$1545.00 (town tax)
- 528.39 (state tax)
$1016.61 (savings annually)
The tax savings each year is quite substantial.
I have listed the state valuation for each county for 2015 and the general requirements below. You can estimate what you can save based on your town and county. Contact me if you have questions about the program or would like to enter the program.
In addition to the general requirements listed below, you must have a forest management plan written for your property and an application for the Tree Growth Law Program must be filed with the town. Applications must be filed by April 1 to qualify for the current year. . There are state and federal programs that pay 50% of the cost of the forest management plan. The plan pays for itself usually within 1 to 2 years. You can also claim a $200 tax credit for a forest management plan every 10 years.
Program General Requirements
1. You must own at least 10 acres of forest land to be classified.
2. Forest land means land used primarily for the growth of trees to be harvested for commercial use; may be either seedling, poletimber, or sawlog stands.
3. Land shall not be excluded because of:
a. Multiple use for public recreation;
b. Statutory or governmental restrictions which prevent commercial harvesting of trees or require a primary use of the land other than commercial harvesting;
c. Deed restrictions, restrictive covenants or organizational charters that prevent commercial harvesting of trees or require a primary use of land other that commercial harvesting and that were effective prior to January 1, 1982;
d. Past or present multiple use for mineral exploration.
4. In the case of ownership in common, unanimous consent of all owners of the parcel is required for filing.
5. When the value of a recreational use lease exceeds the value of the tree growth determined pursuant to 36 MRSA, section 576, the land is to be considered no longer primarily used for the continuous growth of forest products and should be withdrawn from the Tree Growth classification. Parcels of 100 acres or less are exempted from this provision.
Tree Growth Tax Law Valuation Schedule - 2015
COUNTY SOFTWOOD MIXED WOOD HARDWOOD
Androscoggin 389 310 235
Aroostook 120 134 155
Cumberland 389 310 235
Franklin 290 227 235
Hancock 119 126 117
Kennebec 333 270 183
Knox 333 270 183
Lincoln 333 270 183
Oxford 290 227 235
Penobscot 119 126 117
Piscataquis 120 134 155
Sagadahoc 389 310 235
Somerset 120 134 155
Waldo 333 270 183
Washington 119 126 117
York 389 310 235
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