Iowa

Property Classification:

For purposes of property tax classification "forest land" falls under the category of "agricultural real estate" (Rule 701-71.1, IAC)

Agricultural real estate: Land and improvements used for raising crops, forest or fruit trees, livestock, horticulture, and woodlands, wastelands, and pastureland used in conjunction with agricultural real estate, are classified as "agricultural real estate."

Agricultural real estate includes all tracts of land and the improvements and structures located on them that are in good faith used primarily for agricultural purposes, except buildings primarily used or intended for human habitation. Land and the nonresidential improvements and structures located on it is used primarily for agricultural purposes if its principal use is devoted to the raising and harvesting of crops or forest or fruit trees, the rearing, feeding, and management of livestock, or horticulture, all intended for profit.

Agricultural real estate:

Agricultural real estate is assessed at its actual value by considering its productivity and net earning capacity determined based on its use for agricultural purposes capitalized at a rate of 7% and applied uniformly among counties and classes of property (Sec. 441.21, Code of Iowa).

In determining the productivity and net earning capacity of agricultural real estate, the assessor uses available data from Iowa State University, the Iowa Crop and Livestock Reporting Service, the Department of Revenue and Finance, or other reliable sources. The assessor also must consider the results of a modern soil survey, if completed.

Valuation of trees (other than on forest or fruit tree reservations) - Trees planted upon any tract of land, other than on forest or fruit tree reservations without regard to area, for forest, fruit, shade, or ornamental purposes, or for windbreaks, do not increase the valuation of the property because of such improvements (Sec. 441.22, Code of Iowa).

Agricultural Land Credit - The agricultural land credit fund is annually apportioned to give a credit against the tax on each tract of agricultural lands within the school districts in which the levy for the general school fund exceeds $5.40 per $1,000 of assessed value. The amount of the credit on each tract of lands is the amount the tax levied for the general school fund exceeds the amount of tax that would be levied on the tract of such lands were the levy for the general school fund $5.40 per $1,000 of assessed value for the previous year. Land owners are not required to file a claim. The county auditor determines the amount of credit applicable to each tract of land.

Forest and Fruit Tree Reservations: (Sec. 427C, IAC)

Forest reservations of not less than 2 acres in continuous area, and "fruit tree reservations" of not less than one nor more than 10 acres in total area, are exempt from property tax.

A "forest reservation" shall contain not less than two hundred (200) growing forest trees on each acre. If the area selected is a forest containing the required number of growing forest trees, it shall be accepted as a forest reservation provided application is made or on file on or before February 1 of the exemption year.

A "fruit-tree reservation" shall contain on each acre, at least forty apple trees, or seventy other fruit trees, growing under proper care and annually pruned and sprayed. A reservation may be claimed as a fruit-tree reservation for a period of eight years after planting provided application is made or on file on or before February 1 of the exemption year.

If any buildings are standing on an area selected as a forest reservation or a fruit-tree reservation one acre of that area shall be excluded from the tax exemption. However, the exclusion of that acre shall not affect the area's meeting the acreage requirement of section.

Restrictions:

Removal of trees - Not more than one-fifth of the total number of trees in any forest reservation may be removed in any one year, excepting in cases where the trees die naturally. (427C.4, IAC)

Forest trees - The ash, black cherry, black walnut, butternut, catalpa, coffee tree, the elms, hackberry, the hickories, honey locust, Norway and Carolina poplars, mulberry, the oaks, sugar maple, cottonwood, soft maple, osage orange, basswood, black locust, European larch and other coniferous trees, and all other forest trees introduced into the state for experimental purposes, shall be considered forest trees within the meaning of this chapter. In forest reservations which are artificial groves, the willows, box elder, and other poplars shall be included among forest trees for the purposes of this chapter when they are used as protecting borders not exceeding two rows in width around a forest reservation, or when they are used as nurse trees for forest trees in such forest reservation, the number of such nurse trees not to exceed one hundred on each acre; provided that only box elder shall be used as nurse trees. (427C.5, IAC)

Groves - The trees of a forest reservation shall be in groves not less than four rods wide except when the trees are growing or are planted in or along a gully or ditch to control erosion in which case any width will qualify provided the area meets the size requirement of two acres. (427C.6,IAC)

Fruit trees - The cultivated varieties of apples, crabs, plums, cherries, peaches, and pears shall be considered fruit trees within the meaning of this chapter. (427C.8,IAC)

Replacing trees - When any tree or trees on a fruit-tree or forest reservation shall be removed or die, the owner or owners of such reservation shall, within one year, plant and care for other fruit or forest trees, in order that the number of such trees may not fall below that required by this chapter. (427C.9,IAC)

Restraint of livestock and limitation on use - Cattle, horses, mules, sheep, goats, ostriches, rheas, emus, and swine shall not be permitted upon a fruit-tree or forest reservation. Fruit-tree and forest reservations shall not be used for economic gain other than the gain from raising fruit or forest trees. (427C.10,IAC)

Penalty - If the owner or owners of a fruit-tree or forest reservation violate any provision of this chapter within the two years preceding the making of an assessment, the assessor shall not list any tract belonging to such owner or owners, as a reservation within the meaning of this chapter, for the ensuing two years. (427C.11,IAC)

Application--inspection--continuation of exemption--recapture of tax - It shall be the duty of the assessor to secure the facts relative to fruit-tree and forest reservations by taking the sworn statement, or affirmation, of the owner or owners making application under this chapter. Once the application has been accepted, the area shall continue to receive the tax exemption during each year in which the area is maintained as a fruit-tree or forest reservation without the owner having to refile.

If the property is sold or transferred, the seller shall notify the buyer that all, or part of, the property is in fruit-tree or forest reservation and subject to the recapture tax provisions. The tax exemption shall continue to be granted for the remainder of the eight-year period for fruit-tree reservation and for the following years for forest reservation or until the property no longer qualifies as a fruit-tree or forest reservation.

If the area is not maintained or is used for economic gain other than as a fruit-tree reservation during any year of the eight-year exemption period and any year of the following five years or as a forest reservation during any year for which the exemption is granted and any of the five years following those exemption years, the assessor shall assess the property for taxation at its fair market value as of January 1 of that year and in addition the area shall be subject to a recapture tax. However, the area shall not be subject to the recapture tax if the owner, including one possessing under a contract of sale, and the owner's direct antecedents or descendants have owned the area for more than ten years.

The tax shall be computed by multiplying the consolidated levy for each of those years, if any, of the five preceding years for which the area received the exemption for fruit-tree or forest reservation times the assessed value of the area that would have been taxed but for the tax exemption. This tax shall be entered against the property on the tax list for the current year and shall constitute a lien against the property in the same manner as a lien for property taxes. The tax when collected shall be apportioned in the manner provided for the apportionment of the property taxes for the applicable tax year.

Other Exemptions:

Native prairie and protected wetland - Land designated as a native prairie or protected wetland by the Department of Natural Resources is exempt from property taxation (Sec. 427.1(23), Code of Iowa).

Application for exemption - Applications for the exemption of property as native prairie or protected wetland must be filed with the assessing official by February 1 of the year for which the exemption is requested. The application must be accompanied by an affidavit signed by the applicant that if the exemption is granted, the property will not be used for economic gain during the assessment year in which the exemption is granted. If the property is used for economic gain during the assessment year in which the exemption is granted, the property will lose its tax exemption and be taxed at the rate levied by the county for the fiscal year beginning in that assessment year. The first annual application is to be accompanied by a certificate from the Department of Natural Resources stating that the land is native prairie or protected wetland (Sec. 427.1(23), Code of Iowa).

Certificate from Department of Natural Resources - The Department of Natural Resources issues a certificate for the native prairie exemption if it finds that the land has never been cultivated, is unimproved, is primarily a mixture of warm season grasses interspersed with flowering plants, and meets the other criteria for native prairie. The Department will issue a certificate for the wetland exemption if it finds the land is a protected wetland, or if the wetland was previously drained and cropped but has been restored under a nonpermanent restoration agreement with the Department or other county, state, or federal agency (Sec. 427.1(23), Code of Iowa)

Land certified as a wildlife habitat - The owner of agricultural land may designate up to two acres of the land for use as a wildlife habitat. If qualified, the Department of Natural Resources will certify the designated land as a wildlife habitat and will send a copy of the certification to the appropriate assessor. The certified property is exempt from property tax until the Department withdraws certification (Sec. 427.1(24), Code of Iowa).

The state of Iowa does not have a severance or yield tax on timber or timber products.

• Crowley, S., and M. Duster. 2015. Legislative Guide- Local property tax. Iowa Legislative Services Agency, Des Moines, IA. https://www.legis.iowa.gov/docs/publications/LG/9447.pdf