State Tax Laws > Property Taxes > Summary > Wisconsin
For the complete text of Wisconsin statutes please refer to the Wisconsin State Legislature. For other property tax information please refer to the Wisconsin Department of Revenue.
Property Classification:
For tax purposes property is divided into two classes, taxable general property and exempt property. General property includes all taxable real property. Real property is generally classified on its use. Forest land is considered Class F (Productive Forest Land).
Productive forest land - means land that is producing or is capable of producing commercial forest products and is not otherwise classified.
The classification of productive forest land and related Class F services is determined primarily by the use of the land. Forested areas used for hunting, fishing, recreation, or for a game preserve should be classified as forest unless they are clearly operated as a commercial enterprise, or are exempt.
Forest land includes those forested areas, not on farms or ranches, that are being managed or set aside to grow tree crops for "industrial wood" or to obtain tree products such as sap, bark, or seeds. Forested areas on farms, ranches, or estates, with no commercial use made of the trees are classified as productive forest land. Cherry and apple orchards, and Christmas tree plantations are classified as agricultural property.
Forest Crop Law: (Sec 77.04, Wis. Stats)
Qualifications: (NOTE: This program is closed to enrollment, however there are still outstanding contracts)
To qualify as forest cropland, the owner must meet the following requirements:
2. The land must be an entire quarter-quarter section, fractional lot, or government lot as determined by U.S. Government survey plot;
3. The highest and best use of the land must be for growing timber and forest crops;
4. Any improvements must be minimal and must be related to forestry use (buildings on forest cropland are assessed as personal property);
5. Nonproductive land cannot exceed 20% of the total area, except under unusual circumstances; and
6. All persons holding encumbrances upon the land must join in the petition to have the land classed as forest cropland.
Contract - If the owner of forest cropland meets the requirements, a contract is created between the owner and the Department of Natural Resources. The contract runs for 25 or 50 years at the option of the owner. The owner agrees to allow the public to hunt and fish on the land, to practice sound forest management, and to give the Department notice of intent to harvest timber at least 30 days prior to cutting.
Assessment (acreage share) - The rate of tax depends upon when the land qualified as cropland. For land qualified as forest cropland prior to 1972, the rate is 10 cents per acre per year, and after 1971, the rate is recalculated every ten years based on the increased value of all other property classes. From 1994 through 2003 the rate is 83 cents per acre per year. Payments in 2004 to 2013 will be $1.66 per acre.
Withdrawal Tax - Land may be withdrawn from the program at the owner's option. A finding by the DNR that the owner has not complied with the contract terms may also result in withdrawal. In either event, the owner becomes subject to a withdrawal tax based on the difference, during each year of the contract, between the amount of real estate taxes that would have been levied on the land and the acreage shares and severance taxes actually paid.
Each year's difference is then multiplied by a factor reflecting simple interest at 12% per year (5% for pre-1977 contracts) for the number of years the real estate tax has been deferred. The withdrawal tax is equal to the sum of these products. From the withdrawal tax, the department retains an amount equal to the sum of state payments for that parcel to the town or village; the balance is remitted to the town or village, which must share 20% with the county.
Contract Expiration - When a 25 or 50-year contract expires and is not renewed, a severance tax of 10% of the value of the standing timber is assessed just as if the timber had been cut.
Severance Tax - Each year, the DNR holds a public hearing in order to establish reasonable stumpage values for timber in several regions of the state. When timber on FCL lands is harvested, these stumpage values are multiplied by the volume of timber cut; 10% of the resultant amount is paid to the state as a severance tax. Severance taxes not paid within 30 days become subject to a penalty. From the severance tax collected from a particular parcel, DNR retains an amount equal to the sum of annual payments the state has made to the town or village for that parcel. The excess, if any, is paid to the town or village, and 20% of the excess is shared with the county.
Managed Forest Law: (Sec. 77.82, Wis. Stats)
Qualifications -
A parcel of land is eligible for designation as managed forest land only if it fulfills the following requirements:
1. It consists of at least 10 contiguous acres in a single municipality. The fact that a lake, river, stream or flowage, a public or private road or a railroad or utility right-of-way separates any part of the land from any other part does not render a parcel of land noncontiguous.
2. At least 80% of the parcel must be producing or capable of producing a minimum of 20 cubic feet of merchantable timber per acre per year.
The following land is not eligible for designation as managed forest land:
1. A parcel of which more than 20% consists of land that is unsuitable for producing merchantable timber, including water, marsh, muskeg, bog, rock outcrops, sand dunes, farmland, roadway or railroad and utility rights-of-way.
2. A parcel that is developed for commercial recreation, industry, human residence or any other use determined by the department to be incompatible with the practice of forestry.
Rate of tax for lands entered before 2005. For tax years 2003 --2007, for lands entered under the Managed Forest Law before 2005, the rates are 83¢ per acre for land that is designated as open to the public and $1.95 per acre for land designated as closed to the public. The rates for lands entered before 2005 will continue to remain lower than the rates for lands entered after 2004. The Department of Revenue is to adjust the rate every five years after 1997. In addition, the owner pays a yield tax of 5% of the stumpage value of any harvested timber to the Department of Natural Resources. (Sec. 77.87(1), Wis. Stats)
The 5% yield tax will be waived for the first five years of most MFL land entered under the law in 2005 and later. Lands converted from the Forest Crop Law or renewed into MFL at the end of the original MFL order period are not exempt from the 5% yield tax when timber is harvested.
Rate of tax for lands entered after 2004. Beginning in 2005, property tax rates on productive forest land are changed to 5% of the average statewide property tax per acre on open land and 25% of the average statewide property tax per acre on closed land. (Sec. 77.84(2), Wis. Stats) Thus, the rates for lands entered under the Managed Forest Law from 2005 through 2007 will be $1.30 per acre for open lands and $6.50 per acre for closed lands. The Department of Revenue is to adjust the rates in 2007, for tax years 2008-2012, and again every five years. (Sec. 77.84(2), Wis. Stats)
Contract - Landowners sign a 25- or 50-year contract and must follow a forest management plan. Enrolled land is generally open to public hunting, fishing, cross country skiing, hiking, and sightseeing; however, landowners can choose to close up to 80 acres to public access by paying an annual closure fee.
Withdrawal Tax - To withdraw land from the MFL, the owner pays the higher of (a) the real estate taxes that would have been levied on the land reduced by the acreage shares and yield taxes actually paid, or (b) 5% of the stumpage value of the merchantable timber on the land. The DNR retains 50% of any withdrawal tax and pays the other 50% to the town or village in which the withdrawn lands are located.
Contract Expiration - When a 25- or 50-year contract expires and is not renewed, the land becomes subject to the property tax.
Yield Tax:
There is a yield tax equal to 5% of the stumpage value of merchantable timber cut on "Managed Forest Lands" that must be remitted to the Department of Natural Resources. If the timber is harvested on forest croplands enrolled under laws prior to 1986, the yield tax is 10%.
A reduction of 30% of the stumpage value for severance tax, as listed under section NR 46.09(2) will be made for those species salvaged as a result of catastrophic losses. Catastrophic losses are defined as severe losses caused by fire mortality, ice, snow, insects, disease, wind and flooding. In order to be eligible for this reduction, the catastrophic loss must directly involve 20 acres or more and must result in a reduction of 30% or more in stumpage value to the owner as certified by the landowner on forms provided and verified by department appraisal. The landowner or representative may be required to accompany the department field inspector.
The tax must be paid to the Department of Natural Resources by the last day of the month that follows mailing of a tax certificate indicating how much is due. The stumpage value of the timber is determined each year by the Department of Natural Resources, and the owner of the property is personally liable for payment of the tax.