California Timber Yield Tax Trends

June 31,2018

Data shown in the graphs below are from the California Timber Harvest Statistics report accessed from the California Board of Equalization web site at this address: http://www.boe.ca.gov/proptaxes/pdf/CopyAP1978to2017.pdf

Timber volume totals from public* and private lands decreased generally after a high in the year 1988 of about 4,670 Million board feet (MMBF), followed by a leveling out around the year 2001 and remaining under 1,800 MMBF thereafter. Substantially affecting this overall trend is a decline in volume from public lands.


Volume  All Timber 1978-2017 *PUBLIC is timber removed from local, state, and federal government lands. It does not include timber removed from tribal lands.

From 1988 to 2001, 25 percent of the total volume came from public sources. From 2002 to 2015, public contribution was 11 percent, and the total volume harvested was about half of that of the earlier period. Absent a change in federal policy regarding timber harvest on public lands, harvest on private lands will probably continue to drive the overall domestic supply stream, influenced by economics and regulatory policies.

Tax value reached a high point of approximately $1.3 billion in 1993. A period of decline over the following five years briefly reversed before it fell to just over $400 million in 2002. After another few years of small increases there was a slow falling off until 2008, and ending in a low of about $99.3 million in 2009. Value climbed in 2010 and 2011 (as did volume) and remained under $400 million until 2017 when the value was $429 million. It is interesting to note that high tax revenues do not necessarily translate into high harvest levels because timber values differ substantially among species harvested, which explains why the value peak in 1993 misses the volume peak by five years.


Volume  All Timber 1978-2017

The low point in 2009 for both harvest volume and value has been attributed to the housing market collapse and recession of 2007-2009, which reduced demand for lumber (PNW-GTR-908).

The uptick in 2010 and 2011 probably would not have been so pronounced had there been no fire salvage volume in 2008-2009 (i.e., the bottom would not have been as deep). But the primary factor in the California log market in 2010-11 was the export market to China. (GTR-NRS-P-105).

Note: On July 1, 2017, the Timber Yield Tax program, which sets the harvest value of timber and collects an in-lieu tax when it is harvested, was moved from the California Board of Equalization (BOE) to the California Department of Tax and Fee Administration (CDTFA). The revenue from this program is allocated to the counties where the timber was harvested.

References

PNW-GTR-908. McIver, Chelsea P.; Meek, Joshua P.; Scudder, Micah G.; Sorenson, Colin B.; Morgan, Todd A.; Christensen, Glenn A. 2015. California's forest products industry and timber harvest, 2012. Gen. Tech. Rep. PNW-GTR-908. Portland, OR: U.S. Department of Agriculture, Forest Service, Pacific Northwest Research Station. 49 p.

GTR-NRS-P-105. Keegan, Charles E.; Sorenson, Collin B.; Morgan, Todd A.; Daniels, Jean M.; Hayes, Steven W. 2012. Impact of the great recession on the forest products industry in the western United States. In: Morin, Randall S.; Liknes, Greg C., comps. Moving from status to trends: Forest Inventory and Analysis (FIA) symposium 2012; 2012 December 4-6; Baltimore, MD. Gen. Tech. Rep. NRS-P-105. Newtown Square, PA: U.S. Department of Agriculture, Forest Service, Northern Research Station. [CD-ROM]: 5-9

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