Posts tagged ‘taxes’
An upcoming web-based presentation (webinar) may be of interest to some MyMinnesotaWoods readers. This one is rescheduled for Friday, March 13, 2009 at 11am Central. The presentation is by Linda Wang of the US Forest Service.
This tax session highlights key timber tax issues faced by private landowners in time for the 2009 filing season. It is intended to provide a snapshot and basic understanding of the timber tax matters in a concise manner for forest and natural resource agency staff, directors, extension agents and program leaders, and foresters.
Click here for complete event details, including how to connect. The event is free and pre-registration is not required. Note: At the time of this writing, that link does not reflect the new date. The actual rescheduled date is Friday, March 13, 2009 at 11am Central.
Extension specialist Mel Baughman reviews how your property tax is determined and covers everything you need to know about Minnesota’s two new tax relief programs: SFIA and 2c Managed Forest Lands. We’ve also got a link to a narrated slideshow on the same topic. Check it out.
Since implementation of Minnesota’s new 2c Managed Forest Lands tax classification, many questions have arisen about exactly what acres are eligible.
I’m forwarding information from the Minnesota DNR and Department of Revenue that goes a long way toward clarifying these questions. Thanks to Andrew Arends (MDNR-Division of Forestry) and Drew Imes (MDOR) for sharing this.
Email dated Nov. 14, 2007 from Andrew Arends, MDNR:
As promised, the Department of Revenue was able to draft a great document to help resource managers determine which forest stewardship acres would quality for the 2c Managed Forest Land property tax program. Please see the attached memo and determination document from the Department of Revenue.
Long story short – more acres will qualify with the new interpretations by the Department of Revenue. Eligible acres will be based on contiguous parcels that contain at least 20 stewardship acres. Basically, if the acres meet the definition of being a stewardship acre, it can be counted as 2c acres (provided there are at least 20 eligible acres in the parcel or in adjoining parcels). Sounds wordy so I suggest you look at the provided maps as visual examples of what might qualify for 2c.
As before, please contact your local county assessor first if you have questions about a landowners application.
Thank you and keep up the good work!
Andrew Arends, DNR-Forestry
A PDF version of the MDOR memo, including visual and text examples, is available from http://www.myminnesotawoods.umn.edu/docs/2cMFL-memo-MDOR.pdf.
The Minnesota legislature has created a new property tax classification for which many Minnesota woodland owners are eligible. This is big news–the new class rate is 0.65 percent, which is a 35 percent reduction.
This new Department of Revenue property tax classification is called 2c Managed Forest Land.
“In addition to leadership from the Minnesota Forestry Association and all the partners who helped, we need to especially thank Senator Tom Bakk and Representative Larry Hosch for sponsoring legislation that led to the 2c Managed Forest Law. The Departments of Revenue and Natural Resources were also very cooperative in drawing up the application and final rules to allow landowners easy access to the program” said Tom Kroll, Arboretum Director at Saint John’s University.
Who’s eligible for this new classification? Any landowner with at least 20 wooded acres (but not more than 1,920 acres) under a current forest stewardship management plan. The forest management plan must be registered with the Department of Natural Resources, Division of Forestry, and must be no more than ten years old. Landowners who don’t have a forest management plan can contact their local DNR Forestry office to request one.
Land already enrolled in a tax reducing program such as Sustainable Forest Incentive Act or Green Acres, to name a few, are not eligible for the 2c Managed Forest Land program. Landowners may also want to confirm that enrolling into 2c will benefit their tax situation. In some instances landowners might currently be taxed at 0.50% rate and enrolling into 2c would raise their tax rate.
Eligible landowners can apply for a change of classification through their county assessor. The assessors have the application form and can provide additional information. (The application form can also be downloaded here.) Landowners who wish to participate for the 2009 tax year need to submit their application by September 1, 2008 through their county assessor.
More detail on eligible acreage (from the application form):
(1) Unplatted real estate that is rural in character, is not used for agricultural purposes, and is not improved with a structure; may qualify for a reduced class rate of 0.65 percent if the property meets all existing requirements. The property must have a qualifying forest management plan (forest stewardship plan) in place, but the property cannot be enrolled in the Sustainable Forest Incentive Act (SFIA) program. A minor ancillary, non-residential structure (see instructions for description) does not disqualify a property from this classification. The commissioner of natural resources must confirm that a property qualifies for the classification.
A property that is improved with a structure that is not a minor ancillary non-residential structure will be split-classified, with 10 acres being assigned to the structure.
Change in highest and best use rules: According to Kroll, the law also changed the rules on “highest and best use” as regards classification. This means that someone with eligible forest land and a plan is entitled to be in the new 2c class (Even if it has lakeshore or is just down the road from a big development.) In the past such properties would have been classed to seasonal recreational or commercial based on their “highest and best use.”
To be clear, the valuation method of property will not change. Property values will continue to be estimated based on comparable sales of similar properties by willing sellers to willing buyers.
“This new tax class is a good thing for Minnesota woodland owners, and the Minnesota Forestry Association is proud to have helped move it forward” said MFA president John O’Reilly.
How to get a forest stewardship plan: Forest stewardship plans are prepared by Minnesota Department of Natural Resources (DNR) professionals and their private forest management (PFM) partners. PFM partners include private consulting foresters, Soil and Water Conservation Districts, and others. Landowners who do not already have a qualifying plan are unlikely to be able to obtain one in time to enroll in the 2c classification for the 2009 tax year (before September 1, 2008).
The DNR expects a major increase in requests for stewardship plans in the coming months, due largely to the availability of the new 2c classification. As a consequence, landowners may experience delays in processing their plan requests. More information on this process will be available from DNR, and through this site, in coming months.
To sign up for a stewardship plan, contact your local DNR Forestry office. You’ll be added to a list and your plan will be prepared either by a DNR forester or an approved contractor.
For more information: Contact your county tax assessor, DNR Forestry office, or the Department of Revenue. If you’re currently enrolled in the Green Acres program, you may want to read this thread on our discussion board about the relationship between Green Acres and the new 2c Managed Forest Land classification.
Questions: Feel free to add your questions either below or on the discussion board, and we’ll do our best to answer them.
Five important considerations affecting income taxes on Minnesota family forests.