Taxation of forest lands under the productivity option

Official textlegislature.idaho.govlast amended 202023 subsections

63-1705. (1) In order to encourage private forest landowners to retain and improve their holdings of forest lands and to promote better forest management, forest lands subject to this option shall be appraised, assessed and taxed as real property under the provisions of this section.

(2) Forest lands shall be governed by the following productivity classifications and assessments:

(a) All forest land shall retain the productivity classification that it held in tax year 2021 for each year thereafter, unless there is a substantial change of use or the landowner successfully appeals the classification pursuant to chapter 5, title 63, Idaho Code. All forest land shall be assessed in accordance with subsection (4) of this section.

(b) Changes to productivity classification of forest land prior to January 1, 2021, shall be made pursuant to the process set forth in section 63-1705A, Idaho Code, and shall be assessed each year thereafter in accordance with the provisions of subsection (4) of this section, except that all reviews by county assessors pursuant to section 63-1705A, Idaho Code, shall be completed no later than January 1, 2021.

(c) The productivity classification for land newly classified as forest land after tax year 2021 shall be determined pursuant to section 63-1705A, Idaho Code. In the year immediately following classification and for each year thereafter, newly classified forest land shall retain its productivity classification and shall be valued in accordance with the provisions of subsection (4) of this section.

(3)(a) Prior to tax year 2021, the forest land value shall be determined by the timber productivity valuation process, as provided for in the committee on forest land taxation methodologies (CFTM), user’s guide to the timber productivity option’s valuation method – 2005 (Schlosser, January 1, 2005, Moscow, Idaho), referred to in this chapter as the "user’s guide," on file with the Idaho state tax commission, available on the website of the Idaho state tax commission, and which shall be made available in the office of each county assessor, which values the net wood production over a reasonable rotation period plus other agricultural-related income, if any, less annualized custodial expenses as defined in section 63-1701, Idaho Code. The state tax commission shall promulgate rules relating to the timber productivity valuation process, including custodial expenses, as provided for in the user’s guide and the provisions of this chapter.

(b) The market value for assessment purposes shall be determined annually by the county assessor using the timber productivity valuation process developed by the CFTM, and as further prescribed in rule. Effective January 1, 2012, the forest land values for taxation purposes will be floored at the 2011 valuation level of all four (4) of the forest value zones for the next ten (10) year period. The ceiling for taxation purposes for forest land values during such ten (10) year period will be capped at thirty percent (30%) above the 2011 forest land values. The annual changes for taxation purposes shall be limited to not more than a five percent (5%) annual increase or decrease from the immediate prior year based upon the 2005 user’s guide valuation model, provided however, that no decrease shall be in an amount less than the established floor nor increase above the established ceiling.

(c) Actual annual valuation calculations shall also be tracked, though not necessarily utilized for taxation purposes. Actual annual valuation calculations may drop below the floor or rise above the ceiling. Forest land values derived by the model will be used as the forest land value for taxation purposes only when the derived value is between the floor and the ceiling. Furthermore, the actual annual valuation calculations shall not exceed a five percent (5%) adjustment from the previous year’s valuation calculation. When the model-derived values for a given year are below the floor, the forest land value for taxation purposes will be equal to the floor value for that year. When the model-derived values in a given year are above the ceiling, the forest land value for taxation purposes will be equal to the ceiling for that year.

(d) Except as provided in subsection (6) of this section, any change to the productivity classification of a forest land parcel prior to tax year 2021 shall adhere to the process set forth in this subsection and in section 63-1705A, Idaho Code, or else such change shall be void. However, the assessor’s appraisal shall be upheld upon appeal if the board of equalization determines that the landowner has purposely or unreasonably denied the assessor timely access to the land to complete fieldwork under the provisions of section 63-1705A, Idaho Code.

(e) The CFTM may recommend to the legislature a new process by which county assessors establish forest land productivity classification for land newly designated as forest land after tax year 2021.

(4) Beginning in tax year 2021 and each tax year thereafter, land assessed as forest land shall be valued by indexing each parcel’s value by the percentage change in the five (5) year rolling average stumpage values, with 2019 being the base year. The stumpage values shall be based upon the preceding five (5) year rolling average value of timber harvested within the forest value zone from state timber sales or, if unavailable, the best available data for the same five (5) year period. Any changes in value shall be limited to no more than a five percent (5%) annual increase or decrease from the immediate prior year. The state tax commission shall provide the stumpage value calculation required under this subsection by March 1 of each year.

(5) Pursuant to the provisions of section 63-602W, Idaho Code, the inventory of forest products shall not be included as part of the valuation of the forest land.

(6) Forest lands upon which, at any time after January 1, 1982, the trees are destroyed by fire, disease, insect infestation or other natural disaster such that the lands affected will not meet minimum stocking requirements under rules adopted pursuant to chapter 13, title 38, Idaho Code, shall be eligible for a reduction in value for the first ten (10) property tax years following the loss. The amount of reduction shall be determined by dividing the average age of the trees destroyed by the rotation age for the specific forest productivity class appropriate for the affected acres. In no instance shall the annual reduction exceed eighty percent (80%) of the original forest value per year. In order to obtain a reduction, the landowner shall, on or before January 1 following the destruction, make written application to the assessor indicating the legal description of the lands in question and stating all pertinent facts. The assessor may investigate the facts and may request assistance from the state tax commission in performing such investigations. If the requirements are met, such forest lands shall be assessed and taxed on the reduced basis herein provided.

(7) Buildings and other improvements, other than roads, located on forest lands shall be appraised, assessed and taxed as provided by applicable laws and rules.

(8) There is created within the Idaho state tax commission the CFTM. The membership of the CFTM shall be:

(a) A nonvoting chairman who shall be the member of the Idaho state tax commission assigned to property tax matters;

(b) Four (4) members who are representing business entities owning no fewer than five thousand (5,000) acres of Idaho forest land, provided that there shall be only one (1) representative for each individual business entity and provided further that affiliated business entities shall be considered a single business entity for the purposes of this section. The business entity employing such member shall designate a successor member at its discretion. If a vacancy occurs among the representatives of forest landowners owning no fewer than five thousand (5,000) acres, a replacement member will be selected by the remaining members qualifying under the provisions of this section;

(d) Five (5) members selected from the membership of the Idaho association of counties; and

(e) The state superintendent of public instruction or his/her designee, in a nonvoting capacity.

(9) The CFTM may retain a forest economist selected by a majority of its members to advise the CFTM.

(10) The costs of each CFTM member shall be borne by the respective member. The fees and costs of the forest economist shall be borne as determined by the CFTM.

(11) The CFTM may prepare and deliver written reports to the house of representatives revenue and taxation committee and the senate local government and taxation committee of its findings and recommendations for legislation as the need may arise. The CFTM may meet periodically as determined by its chairman or the CFTM.

Amendment history

63-1705, added 1982, ch. 123, sec. 5, p. 353; am. 1984, ch. 237, sec. 2, p. 568; am. 1996, ch. 322, sec. 61, p. 1090; am. 1998, ch. 198, sec. 1, p. 711; am. 2000, ch. 156, sec. 2, p. 397; am. 2005, ch. 24, sec. 2, p. 75; am. 2011, ch. 5, sec. 1, p. 11; am. 2012, ch. 9, sec. 1, p. 14; am. 2017, ch. 48, sec. 1, p. 76; am. 2018, ch. 83, sec. 1, p. 186; am. 2020, ch. 247, sec. 1, p. 721.

Source: view the official text

In this chapter (9 sections)

63-1701 · Definitions
63-1702 · Lands of less than five acres
63-1703 · Certain forest lands to be designated for taxation by owner —…
63-1704 · Large-size forest tracts
63-1705 · Taxation of forest lands under the productivity option
63-1705A · CLASSIFICATION OF FOREST LANDS
63-1706 · Yield tax on applicable forest products
63-1707 · Examination of records
63-1708 · Property exempt from taxation

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