Debarked log entering mill
State and Federal Tax Incentives
State - Land Tax Incentives
In North Carolina, many private landowners can take advantage of the state's forest land tax deferral program, which was designed to alleviate the tax burden on farmers with forested land. This initiative allows forest landowners to potentially save as much as 85 percent on their annual land taxes for properties designated as forested. To qualify for this tax deferral, landowners must possess a minimum of 20 acres of forested land and must have a forest management plan in place that outlines their intentions to cultivate timber on land suitable for producing marketable timber.
Federal - Tax Incentives
The federal government recognizes that small private landowners, who collectively own a significant portion of the nation's forest land, often lack the financial resources necessary for reforestation efforts. To address this issue, a forestry incentive program has been established to assist these landowners in reducing their income tax liabilities. This program supports private landowners engaged in tree planting and timber stand improvements, allowing them to claim investment credits and deduct reforestation expenses over several years. A forester can help create a management plan and handle the submission of required documentation.
Assistance Programs
Private landowners manage 80% of the commercial forest land, which accounts for 58% of the total commercial forest land in the United States. Unfortunately, a significant portion of this land is underutilized. To encourage better use of these resources, the government has introduced forestry assistance programs that can reimburse landowners for up to 40% of the costs associated with establishing new forests. Eligible expenses include tree planting, land preparation, and the management of competing vegetation to promote desirable trees. However, it is important to note that landowners cannot receive both state and federal cost-share assistance for the same acre of land for identical practices.
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