Grossman Forestry Company, Property Tax Programs

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If you own or are considering the purchase of Michigan woodlands, a scientific evaluation can be made to identify your forest management options.

Before you consider a timber harvest of your Upper Peninsula forest, it is essential that you have written management plan.

A well thought out forest management plan should describe your property by stand or timber type.

We help you improve and maintain soil and water quality, and reforestation practices when needed.

The American Tree Farm System has established a relatively new program called the American Tree Farm System, Group Certification Process.

If you are interested in long-term sustainable forest management for your property, this is the program for you.

The natural woodlot is an apparently simple place. Its esthetic elements don't appear to be complex; clean water, timber, wildlife.

Forest care benefits both the woodland property and its owner by appropriately maximizing the kind of healthy, balanced growth that facilitates both land and habitat improvement.

MICHIGAN TIMBERLAND TAX INFORMATION

Taxes, after all, are dues that we pay for the privileges of membership in an organized society. ~Franklin D. Roosevelt
The hardest thing in the world to understand is the income tax. ~Albert Einstein

Grossman Forestry Company recommends that you consult your tax and legal advisers for advice on your particular tax situation.

QFP - PA 378	Grossman Forestry Company has helped enroll over 297 tracts covering 115,411 acres (01/2023) Public Acts 378, 379 and 380 of 2006 created the Qualified Forest Property (QFP) program and Public Acts 42, 43, 44, 45, 49, and 50 of 2013 changed the administration of the program and some of its major provisions. As soon as Extension bulletins and other information is available we will get it posted. Summary of key provisions: Enrolled property will not pay 18+/- local school millage, but will pay a 2 millage fee for a net reduction of approximately 16+- mills. Enrolled property will not be uncapped when a transfer occurs if the new owner agrees to keep the property in the Act and files the proper paperwork. No public access required. Department of Agriculture and Rural Development (MDARD) approved forest management plan required. Forest Stewardship plan or NRCS plan is sufficient. Management plans must be followed. Timber harvests and other silvicultural practices must be reported to MDARD. Plans may be amended. The first amendment does not require a $50.00 fee but subsequent amendments may require a new $50.00 fee. Minimum of 20 acres with no maximum. Each individual tax parcel must be independently eligible. 80% of forestland must meet minimum production requirements if less than 40 acres. 50% of forestland must meet minimum production requirements if 40 or more acres. Buildings are allowed on enrolled acreage but there is no tax benefit for the value of the buildings. Value of any buildings will come uncapped upon transfer of the property. Penalties for withdraw = current taxable value x benefit received (16 mils+-) x number of years enrolled up to 7 if one or more timber harvests have taken place. Times 2 if no timber harvests have taken place. Additionally if the property was transferred and the taxable value remained capped, the benefit of the capping will need to be paid back (up to 10 years worth). Applications need to be submitted before September 1st. $50.00 application fee. Cover sheet must include: i. Legal description for enrolled acreage ii. Tax ID #’s for enrolled acreage. iii. Signatures from all owners.
Social Responsibility to Schools	While some have argued that the State Legislature will make up the lost revenue to the schools from PA378, many observers are very skeptical. It is likely that Michigan rural schools will continue to suffer. Please consider a donation to your local district or district foundation.
TAXATION and FOREST LAND Article #115, January 2007 By Bill Cook, Forester/Biologist, Michigan State University Extension	There are ways to reduce property taxes and income taxes from timber sales. Forest management and timber harvesting are very productive tools in not only achieving ownership objectives, but in also paying off the mortgage. For the savvy forest owner, tax burdens can be significantly reduced.
TAX TIPS FOR 2022 TAX TIPS FOR 2021 TAX TIPS FOR 2019 TAX TIPS FOR 2018 TAX TIPS FOR 2017 TAX TIPS FOR 2016 TAX TIPS FOR 2015 TAX TIPS FOR 2014 TAX TIPS FOR 2013 TAX TIPS FOR 2012 TAX TIPS FOR 2011 TAX TIPS FOR 2010 TAX TIPS FOR 2009 TAX TIPS FOR 2008 TAX TIPS FOR 2007	These bulletins summarizes key federal income tax provisions related to owning and managing forest land.
Minimizing Federal Income Tax for Forest Landowners	This bulletin provides a general guide to federal income tax for forest landowners.
National Timber Tax Web Site	This comprehensive web site provides extensive information about timber taxes. Begin at Getting Started page: Timberland Acquisition Structuring Ownership Timberland Appraisal Determine Your Basis Record Keeping Management & Operating Expenses etc... etc...
Michigan's New Property Tax Laws, summarized from Bill Cook Article listed above.	Property taxes can be significantly reduced by enrolling forested property into programs offered through the State of Michigan. The legislature recognizes the importance of keeping as much forest land as forest, so it has enacted two programs to help accomplish this. The Commercial Forest Program (CFP) has been around in one form or another for decades. The Qualified Forest Program (QFP) is new in 2007. Both programs "buy" sustainable forest management on private land through property tax reductions. If you are not genuinely interested in forest management, then neither program should be considered. The CFP was updated for 2007. The program description is available on the DNR website. For eligible forest property, there's a tax rate of $1.30 per acre with regular nickel increases every five years. The major barrier for many forest owners is the requirement of allowing public access (foot only) for hunting and fishing. The new QFP does not require public access. The tax reduction comes in the form of an exemption from public school taxes. Both programs require forest management plans, have eligibility rules, application procedures, various fees, and withdrawal penalties. There are also important differences. Make sure that you do your homework.