On June 3, more than 80 Members of Congress signed on to a strong bipartisan letter urging House Ways and Means Committee Chairman Paul Ryan and Ranking Member Sander Levin to preserve the timberland tax provisions in any tax reform effort.
The Georgia Congressional delegation expressed strong support in the effort with eight out of 14 members signing on to the letter. Members who signed on to the letter include: Rep. Buddy Carter (R-1), Rep. Sanford Bishop Jr. (D-2), Rep. Lynn Westmoreland (R-3), Rep. Austin Scott (R-8), Rep. Doug Collins (R-9), Rep. Jody Hice (R-10), Rep. Rick Allen (R-12) and Rep. Tom Graves (R-14).
Dave Tenny, President and CEO, National Alliance of Forest Owners, released the following statement thanking members of Congress who helped garner support for the letter.
“We thank Congressman Dan Benishek (R-1-MI), Terri Sewell (D-7-AL), Austin Scott (R-8-GA) and Kurt Schrader (D-5-OR) for leading this effort that gained support from across the political spectrum and a wide variety of geographic areas of the country in recognition that these timberland tax provisions remain good, practical policy,” Tenny said.
In April, the Georgia Forestry Association circulated a petition to encourage GFA members and constituents to show support for the current timber tax provisions. The petition, which is still live on GFA’s website, has gained more than 150 signatures to date. In the next few weeks, GFA will combine all the signatures in a letter to the Georgia Congressional Delegation, thanking them for their support of the current timber tax provisions.
The current federal timber tax provisions are vital to the success of the forestry economy in our state. Specifically, these provisions provide:
- Long-term capital gains treatment of timber revenue (Section 1231(b)(2) of the Tax Code);
- Deductibility of timber growing expenses in the year they are incurred, rather than capitalizing these costs (Section 162 and 263A(c)(5) of the Tax Code);
- Treatment of timberland and standing timber for purposes of the real estate investment trust rules (Section 856 of the Tax Code); and
- Deductibility of up to $10,000 of reforestation expenses and amortizing the remaining of such expenses over a seven-year period (Section 194 of the Tax Code)
According to research by F&W Forestry Services that analyzed the impacts on a typical Georgia forestland owner, removing these provisions would reduce returns and cash flows by almost one-third. Most timberland owners, especially smaller ones, need cash flow to justify their long-term investment in their property. Without existing provisions, many timberland owners would potentially be forced to convert their land to other uses.
Dr. John Bembry owns and manages more than 2,000 acres of timberland on his family’s tree farm in Hawkinsville, GA, and he is concerned about the consequences of the proposed changes.
“Our land supports deer, wild turkeys, gopher tortoises and a myriad of wildlife. We are able to continue to provide wildlife habitat on forestland and cover our costs only because of these tax measures,” Bembry said. “Otherwise, we would be operating in the red pretty fast and it would be too expensive to stay in the sustainable forestry business.”
“It is crucial that Georgia’s forestry community stay engaged on this issue. We have an opportunity to influence decisions that are currently being deliberated, and the time to act is now, not after a tax reform proposal is passed,” GFA President Steve McWilliams said.
GFA members and constituents are encouraged to sign on to the petition as soon as possible. We have made it easy. To find the petition and add your name, visit https://gfagrow.org/advocacy/legislative-action-center/take-action/ and follow the on-screen prompts. If you have any questions, Contact Director of Public Relations Matt Hestad at email@example.com or at 478-992-8110.