State Tax Laws > Property Taxes > Summary > Oregon
For the complete text of Oregon statutes and other property tax information please refer to the Oregon Department of Revenue. or the Oregon Department of Forestry.
Property Classification:
Land is specially assessed as forestland either by an action of the assessor (resulting from highest and best use analysis) or by an action of the property owner (resulting from the owner's designation through an application).
Highest and best use analysis involves the consideration of all the legal, financially feasible, and appropriately supported uses for the land. Among those qualified uses, the one which results in the highest value will be the "highest and best use."
NOTE: In 2004 all owners with more than two acres of forestland were transferred to a new "Forestland Program." Land is taxed at a special rate that is based on the typical price paid for land managed for the production of harvestable timber. No privilege tax is paid when the timber is harvested.
Forestland Program:
Purpose: The Legislature established the Forestland Program as a special tax assessment. This reduced tax assessment was intended to recognize the importance of forestland to Oregon´s economy and respond to the growing pressures that urban growth was putting on natural resource lands. The property tax on the land is based on the value of the land as forestland. Currently, timber is not taxed through the property tax system.
Property size: To qualify for the program, the tax lot must be at least two acres.
Forestland criteria: The land must contain enough trees to meet the stocking standards of the Oregon Forest Practices Act. If your land does not currently meet these standards, you can still qualify if at least 20 percent (minimum two acres) of the land meets the standards and there is a written management plan to plant enough trees to meet the standards within five years. Lands that are not adequately stocked within five years will be disqualified.
Annual property tax: Under this program, land is taxed at a special rate based upon the typical price paid for land managed for the production of harvestable timber. This value is often less than the real market value used for taxing other properties. Property taxes under this program range from 40 cents per acre to $6.75 per acre, depending on location of the property and the ability of your property to grow timber.
Eastern Oregon land is taxed at at an average of about 55 cents per acre.
Western Oregon land is taxed at an average of about $3.40 per acre.
Severance tax at harvest: There is no property tax related to the timber. This means you do not pay the STF Severance Tax when you harvest the timber.
Disqualification or removal: The county assessor may disqualify lands that do not continue to meet the standards for this program. The owner of the disqualified lands will be required to pay an additional tax. This additional tax will be the difference between the tax paid for the previous five years and the tax that would have been paid for the same five year period had the land been taxed at the real market value.
Back tax example:
Tax on a 50-acre tract of land at real market value
5 years x $1,500 tax per year $ 7,500
Tax on a 50-acre tract of land at forestland value
5 years x $150 tax per year $ 750
Difference (back tax) $ 6,750
Change from one forestland option to another: You may change between special assessments without having to pay additional taxes. This means you can put your property into a farm special assessment, the Wildlife Habitat Conservation Program or the STF Option if your land qualifies for these programs.
How to get into the Forestland Program: Apply to the assessor of the county in which the forestland is located. The application is needed to help the assessor determine if your land qualifies.
Small Tract Forestland Option:
The Small Tract Forestland Option (STF Option) was developed to accommodate the varying needs of small-woodland owners. This program allows the landowner to delay paying part of their annual property taxes until after the landowner harvests timber.
Purpose: The 2003 Legislature established the Forestland Program as a special tax assessment. This reduced tax assessment was intended to recognize the importance of forestland to Oregon´s economy and to respond to the growing pressures urban growth was putting on natural resource lands.
How the program works: Like the Forestland Program, the STF Option applies to land classified by the county as either "highest and best use" forestland or designated forestland. A landowner pays an annual property tax on 20 percent of the forestland special assessment value. The STF Severance Tax is paid when the landowner harvests the timber from this property.
How to get into the STF Option tax program: Apply to the assessor in the county in which the land is located. In the case where land was not previously classified as forestland, you will need to complete two applications, the application for designated forestland and the application for the STF Option. Once your property qualifies for the STF Option, you cannot remove it until you sell the property or transfer it to a new owner.
Ownership size: You must own at least 10 acres of forestland but less than 5,000 acres.
You may choose to put property into this option on a tax-lot basis; however, you must include all land you own that is contiguous to this tax lot. The determination of contiguous property includes owning the land as an individual and/or owning the property through a corporation in which you have a majority interest.
Forestland criteria: The land must contain enough trees to meet the stocking standards of the Oregon Forest Practices Act. If your land does not currently meet these standards, you can still qualify if at least 20 percent (minimum of two acres) of the land meets the standards and there is a written management plan to plant enough trees to meet the standards within five years. Lands that are not adequately stocked within five years will be disqualified.
Annual property tax: Land under this program is taxed at 20 percent of the special assessment value, which is based upon the typical price paid for land managed for the production of harvestable timber. Property taxes under this program will range from 8 cents per acre to $1.35 per acre, depending upon the ability of your property to grow timber.
Eastern Oregon land will be taxed at an average of 11 cents per acre.
Western Oregon land will be taxed at an average of 68 cents per acre.
Severance tax at harvest: The STF Severance Tax applies to timber harvested from lands classified under the STF Option.
The tax rates are intended to recover the unpaid property tax projected over a typical rotation length for an average productivity class.
Eastern Oregon rate: $ 3.21 per MBF (2006 rate)
Western Oregon rate: $ 4.11 per MBF (2006 rate)
These tax rates will be indexed annually at the rate that the specially
assessed forestland has increased or decreased from one year to the next.
Disqualification or removal: The county assessor may disqualify
lands that do not continue to meet the standards for this program. The owner
of the disqualified lands will be required to pay an additional tax assessment.
This additional assessment for the STF Option is a two-step calculation:
The difference between the tax paid under the STF Option and the tax that would have been paid under the Forestland Program for the number of years the property has been in the STF Option, up to a maximum of 10 years.
The difference between the tax paid for the previous five years and the tax that would have been paid for the same five-year period had the land been taxed at the real market value.
Example
Step 1
Tax on a 50-acre tract of land at forestland value
10 years x $150 per year $1,500
Tax on a 50-acre tract of land at STF Option value
10 years x $30 per year $ 300
Difference (back tax step 1) $1,200
Step 2
Tax on a 50-acre tract of land at real market value
5 years x $1,500 tax per year $7,500
Taxon a 50-acre tract of land at STF Option value
5 years x $30 tax per year $ 150
Difference (back tax step 2) $7,350
Total (back tax due) $8,550
Once you are disqualified from the STF Option you may not get back into the program for five years.
Change from one forestland option to another: Properties
under this option will remain classified under this program unless the property
ownership is transferred or is no longer being used as forestland.
Forest Products Harvest Tax: (FPHT)
The Forest Products Harvest Tax (FPHT) applies to timber harvested from any land in Oregon. No distinction is made between timber harvested from private lands or government-owned lands. The tax law does exempt the first 25,000 board feet of timber harvested by an owner each year.
Tax rates: The Oregon Legislature and the Oregon Forest Resources Institute (OFRI) board of directors develop the FPHT tax rates. These rates are applied to each 1,000-board foot of timber harvested.
Forest Products Harvest Tax Rates
| Period of Time | Tax Rate |
| 1/1/2004 thru 12/31/2004 | $2.95 |
| 1/1/2005 thru 12/31/2005 | $2.85 |
| 1/1/2006 thru 12/31/2006 | $2.61 |
| 1/1/2007 thru 12/31/2007 | |
| 1/1/2008 thru 12/31/2008 | |
| 1/1/2009 thru 12/31/2009 | |
| 1/1/2010 thru 12/31/2010 | |
| 1/1/2011 thru 12/31/2011 |
What is taxed?: Generally, any logs or chips harvested is
taxed.
Logs scaled as utility grade or greater are subject to the tax. Loads of logs
sold by the ton are taxable. The Department of Revenue developed conversion
rates to convert from log load weight (tons) to thousands of board feet (MBF).
Loads of logs where fewer than 10 percent of the logs are bigger than 8-inches in diameter are converted using a rate of 11 tons/MBF.
Loads of logs where more than 10 percent of the logs are bigger than 8 inches in diameter will be converted using a rate of 7.5 tons/MBF.
Loads of chips are taxable unless they are made from logs that do not meet utility grade or better, and the chips are to be used as "hog fuel."
Chips made from dead trees will be converted using a rate of 5 tons /MBF.
Chips made from green conifer or hardwoods will be converted using a rate of 11 tons /MBF.
Tax forms: Tax forms for the FPHT are only available through
the Department of Revenue. The agency mails returns in December of the year
of harvest or in January of the following year. The data used to print and
mail these returns comes from the Notice of Operations filed with the Department
of Forestry prior to the harvest. The law requires that the completed return
be mailed back to the Department of Revenue by January 31 of the year following
the harvest. Please note that the returns are computer generated and take
two days to produce. No blank tax forms are available.
Due date: The FPHT is due on January 31 of the year following
the harvest. Taxes filed after this date will be assessed penalty and interest.
A 5-percent penalty is assessed for returns filed between January 31 and April
30. Returns filed after April 30 receive a 25 percent penalty.
Small Tract Forestland (STF) Severance Tax:
Purpose of the tax: The STF Severance Tax applies to timber
harvested from lands classified under the STF Option. A landowner pays 20
percent of the property tax through the annual property tax system. The remaining
80 percent is paid when timber is harvested.
Tax rates: The tax rates are intended to recover the unpaid
property tax projected over a typical rotation length for an average productivity
class. The tax rate is in terms of dollars per 1,000 board feet ($/MBF).
STF Severance Tax Rates - Eastern Oregon
| Period of Time | Tax Rate |
| 1/1/2004 thru 12/31/2004 | $3.03 |
| 1/1/2005 thru 12/31/2005 | $3.12 |
| 1/1/2006 thru 12/31/2006 | n/a |
| 1/1/2007 thru 12/31/2007 | n/a |
| 1/1/2008 thru 12/31/2008 | n/a |
| 1/1/2009 thru 12/31/2009 | n/a |
| 1/1/2010 thru 12/31/2010 | n/a |
| 1/1/2011 thru 12/31/2011 | n/a |
STF Severance Tax Rates - Western Oregon
| Period of Time | Tax Rate |
| 1/1/2004 thru 12/31/2004 | $3.89 |
| 1/1/2005 thru 12/31/2005 | $4.00 |
| 1/1/2006 thru 12/31/2006 | n/a |
| 1/1/2007 thru 12/31/2007 | n/a |
| 1/1/2008 thru 12/31/2008 | n/a |
| 1/1/2009 thru 12/31/2009 | n/a |
| 1/1/2010 thru 12/31/2010 | n/a |
| 1/1/2011 thru 12/31/2011 | n/a |
The tax rates will be indexed annually at the rate that the specially assessed forestland has increased or decreased from one year to the next. The actual rate change will not be known until the specially assessed forestland value is set, June 1.
What is taxed – Generally, any logs or chips removed from land classified under the STF Option is considered for this tax Loads of logs sold by the ton are taxable unless the loads consist of small (less than 5 inches in diameter) utility-grade logs. The Department of Revenue developed conversion rates to convert from log load weight (tons) to thousands of board feet (MBF).
Loads of logs made up of small logs (less than 8 inches in diameter) will be converted using a rate of 11 tons/MBF
Loads of logs with more than two logs greater than 8 inches in diameter will be converted at a rate of 7.5 tons/MBF.
Loads of chips are taxable unless they are made from logs that would grade utility grade or lower and the chips are to be used as “hog fuel”
Logs scaled as utility grade or lower are exempt from this tax.
Tax forms: Tax forms for the STF Severance Tax are only available through the Department of Revenue. The agency mails out returns in December of the year of harvest or in January of the following year. The data used to print and mail these returns comes from the Notice of Operations filed with the Department of Forestry prior to the harvest. The law requires that the completed return be mailed back to the Department of Revenue. Please note that returns are computer generated and take two days to produce. Blank tax forms are not available.
Due date: The STF Severance Tax is due on January 31 of the year following the harvest. Returns filed after this date will be assessed penalty and interest. A 5-percent penalty is assessed for returns filed between January 31 and April 30. Returns filed after April 30 receive a 25-percent penalty.
Underproductive Forestland Conversion Tax Credit
The Oregon Underproductive Forestland Conversion Tax Credit provides a 50%
state income tax credit for reforestation projects. Eligible costs include
materials, labor excluding self-labor, and maintenance costs. Financial assistance
from any incentive program must be deducted from your reforestation costs.
Your local stewardship forester can provide further details on this program.