State Tax Laws > Property Taxes > Summary > California

For complete text of the California statutes and other property tax information please refer to the California Franchise Tax Board.

Property Classification:

Property is classified by statute for assessment purposes into:

Real property (including fixtures and improvements),

Tangible personal property, and

Intangibles.

Real property includes the land; any right to possession of land; ownership or claim to ownership of land; all standing timber, whether planted or of natural growth and whether or not owned by the owner of the land; all mines, minerals, and quarries on the land; and any rights or privileges that are appurtenant to standing timber, mines, minerals, and quarries (Sec. 104, Rev. & Tax. Code; ; Reg. 121, 18 CCR; ). Real property also includes any improvements on the land.

"Improvements" - Improvements include buildings, structures, fixtures, and fences erected on or affixed to land. Also defined as improvements are fruit and nut-bearing trees, ornamental trees, and vines that are not naturally growing on the land and not specifically exempt from taxation.

All nonexempt real property is assessed at its full cash value as of the 1975-76 tax year, adjusted for inflation. However reassessments are made for any subsequent changes in ownership (unless specifically exempted) and for most new construction.

A presumption exists that the latest sales price, adjusted for inflation, reflects the property's full cash value; however, standard appraisal techniques are used to value property in instances when this presumption is inapplicable, and specific appraisal methodologies are provided for certain types of property, such as "enforceably restricted" and " open-space land.

Timberland Production Zone:

A county board of supervisors may designate areas of timberland in their counties as timberland preserves. The zoning designation is known as a Timberland Production Zone (TPZ). The land in a TPZ is restricted in use to the production of timber for an initial 10-year term and is considered "enforceably restricted.

Land that is subject to enforceable restrictions is assessed by considering values of comparable lands subject to similar restrictions.

If the land is rezoned, i.e., removed from timberland production classification, a tax recoupment fee is payable based on a statutory factor multiplied by the last pre-timberland production classification assessed value of the property and on the number of years remaining in the 10-year term (Sec. 51140 through Sec. 51146, Govt. Code).

"Timber" - means trees of any species maintained for eventual harvest for forest products purposes, whether planted or of natural growth, standing or down, on privately or publicly owned land, including Christmas trees, but does not mean nursery stock.

"Timberland" - means privately owned land, or land acquired for state forest purposes, which is devoted to and used for growing and harvesting timber, or for growing and harvesting timber and compatible uses, and which is capable of growing an average annual volume of wood fiber of at least 15 cubic feet per acre.

"Timberland production zone" or "TPZ" - means an area which has been zoned pursuant to Section 51112 or 51113 and is devoted to and used for growing and harvesting timber, or for growing and harvesting timber and compatible uses.

Valuation of "Enforceably Restricted" Timberland: (Sec. 434 and 434.5 Rev. & Tax Code)

Five site quality classifications, ranging from Site I  as the most productive to Site V as the least productive or inoperable have been established for the Redwood Region, the Pine-Mixed Conifer Region, and the Whitewood Subzone of the Redwood Region (Sec. 434.5, Rev. & Tax. Code; Sec. 434, Rev. & Tax. Code).

The statute also sets forth the specific value per acre under each of the five site quality classifications for the three regions; these statutory values are subject to adjustment. By November 30 of each year, the SBE must certify to local assessors the current timberland values so determined (Sec. 434.5, Rev. & Tax. Code).

The value per acre of timberland zoned under the provisions of Section 51110 or Section 51113 of the Government Code shall be determined from the following schedule:

Redwood Region - means all those timberlands located in Del Norte, Humboldt, Sonoma, Marin, Monterey, Santa Cruz, and San Mateo Counties and that portion of Mendocino County which lies west and south of the main Eel River.

Whitewood Subzone of the Redwood Region - means that timberland located within the Redwood Region within which the assessor has determined that redwood did not exist as a species in the composition of the original timber stand, or which has not been replanted with redwood for commercial purposes.

Pine-Mixed Conifer Region - means all other timberlands outside the Redwood Region.

Redwood Region	2005
Site I	$266
Site II	$216
Site III	$189
Site IV	$164
Site V (and inoperable)	$ 52
Pine-Mixed Conifer Region
Site I	$145
Site II	$102
Site III	$ 80
Site IV	$ 56
Site V (and inoperable)	$ 30
Whitewood Subregion
Site I	$189
Site II	$139
Site III	$117
Site IV	$ 87
Site V (and inoperable)	$ 46

To determine the actual tax burden per acre, the zone values are then multiplied by 1% to get the amount of tax per acre that the owner pays. This 1% is a statutory minimum applied throughout the state and can be taken for a state average.

Change of zoning from timberland production

Upon rezoning, land formerly zoned as timberland production land will be assessed on the same basis as real property is assessed (Sec. 51140, Govt. Code; Sec. 51141, Govt. Code; Sec. 51142, Govt. Code). A tax recoupment fee, which is payable to the county in which the rezoning has taken place, will then be imposed. The fee is a multiple of the difference between the amount of the tax last imposed on the property before it was zoned for timberland production and the amount equal to the assessed valuation of the rezoned property times the tax rate of the current levy for the tax rate area.

"Open-space land" treatment:

Timberland may qualify for special treatment as "open-space land" (Sec. 51118, Govt. Code; Reg. 470, 18 CCR). In valuing open-space land that is "enforceably restricted" for the production of timber, a county assessor may not consider sales data but rather must use the present worth of the income that the future harvest of timber crops from the land and the income that other allowed compatible uses can reasonably be expected to yield under prudent management (Sec. 423.5, Rev. & Tax. Code; Reg. 53, 18 CCR).

Compatible use - is a use that does not significantly detract from the use of property for growing and harvesting timber and includes such uses as management for watershed, and for fish and wildlife habitat, and for grazing (Sec. 51104, Govt. Code). The capitalization rate used in valuing other open-space land, discussed at ¶20-194 , must be used in valuing timberland.

Open-space land is "enforceably restricted" for purposes of reduced taxation if it is subject to a contract, agreement, scenic restriction entered into prior to January 1, 1975, open-space or agricultural conservation easement, or wildlife habitat contract.

Tax treatment of standing timber:

Although timberland is subject to property tax, the timber standing on the land is exempt from tax, including possessory interest taxation (Sec. 436, Rev. & Tax. Code; ). However, trees standing on land not zoned as timber production may be assessed on the basis of their esthetic or amenity value (Sec. 436, Rev. & Tax. Code; ).

Immature forest trees planted on lands not previously bearing merchantable timber or planted or of natural growth on land from which 70% of all merchantable timber over 16 inches in diameter has been removed are specifically exempt from property taxation (Sec. 3(j), Art. XIII, Cal. Const. ; Sec. 211, Rev. & Tax. Code; ). Timber is considered immature until it is 40 years old or until it is declared mature by a committee named in the Constitution. The California Constitution authorizes the legislature to provide a system of taxation or exemption of timber or forest trees, including one not based on the value of the property.

Severance Tax:

Each producer of natural resources or timber in the state is required to pay a severance tax (Sec. 26-58-107, A.C.A.). Producers are required to obtain permits before engaging in the business of severing natural resources or timber (Sec. 26-58-106, A.C.A.). The failure to secure a permit is punishable by a fine.

Timber - means either softwood or hardwood species of trees suitable for use as sawlogs, pulpwood, veneer bolts or billets, stave bolts or billets, and splits, handle and other bolts or billets including chemical wood, cross ties, posts, poles, piling, chips, charcoal, or any now known or hereafter discovered use of wood or wood pulp.

Producer - means any person, firm, receiver, or other fiduciary, corporation, or association engaged in the business of severing natural resources (Sec. 26-58-101, A.C.A.).

Severing natural resources - generally means all natural products of the soil or water that are mined, dredged, or otherwise taken or removed, for commercial purposes, from the soil or water.

The timber yield tax rate for 2005 is 2.9%. Tax returns are filed with the SBE on or before the last day of the month following each calendar quarter (Sec. 38402, Rev. & Tax. Code). Tax payments are due on or before the last day of the month following each quarterly period in which the scaling date for the harvested timber occurs (Sec. 38401, Rev. & Tax. Code).

Exemptions

Severance tax is not levied against an individual who occasionally severs natural resources or timber from his or her own property to be used in the construction, repair, or maintenance of his or her own structures or improvements (Sec. 26-58-108, A.C.A.).

Timber is exempt from tax, provided that its immediate harvest value within a quarter does not exceed $3,000 (Sec. 38116, Rev. & Tax. Code, ; Reg. 1024, 18 CCR, ). The exemption prevents harvest value tax collection and administration costs that would otherwise exceed tax revenues collected from low timber