the visible hand

it is the theory which decides what can be observed – einstein

Farm Bill “TREE Act” — Timber Tax reform provisions now law

Posted by ecoshift on May 25, 2008

Timber Tax Reform, Weyerhaeuser’s #1 Federal Issue

The U.S. tax code puts the U.S. timber industry at a distinct disadvantage against international competition as it is subject to significantly higher income taxes than overseas competitors. Weyerhaeuser strongly supports legislation that brings conformity to the tax treatment for private timberlands by treating the long-term tax gain the same. For Weyerhaeuser, timberlands ownership and integration with manufacturing is a core strength of the company. We believe passage of timber tax legislation is urgent, necessary and in the best interests of our shareholders, employees and communities.

Second Highest Tax Rate…in the World!

Marginal Effective Tax Rates, 2005

United States (a) Brazil Canada (b) China Finland Germany Indonesia Russia
Corporate Forestry 37% 22% 51% 17% 31% 30% 8% 9%

(a) Tax for United States includes fully phased-in value of section 199 deduction for domestic production.
(b) Tax applicable to investment in Ontario.
Source: PricewaterhouseCoopers LLP, Taxes in Competing Nations: Their Effects on Investments in Paper Manufacturing and Timber Production, April 2005.

Update: May 22, 2008

U.S. House and Senate Overrides Presidential Veto of Incomplete Farm Bill – Timber Tax Considered Law

Over the past two days, the U.S. House ( 316-108 ) and Senate ( 82-13 ) took successful votes to override President Bush’s veto of the Farm Bill. This means the timber tax reform provisions, along with most of the Farm Bill are now law. (Due to a clerical error, the trade sections of the Farm bill are not a part of the veto override.)

The modified TREE Act provisions, supported by Weyerhaeuser, in the Farm Bill are:

  • Provides a 15% rate for corporations on timber which has been held for 15 years. (This 15% rate is comparable to that paid by many of Weyerhaeuser’s competitors; C-Corporations like Weyerhaeuser current pay a 35% rate on timber gains.)
  • Includes timber REIT modernization provisions.

One Response to “Farm Bill “TREE Act” — Timber Tax reform provisions now law”

  1. Keynesianism…

    […]Farm Bill “TREE Act” — Timber Tax reform provisions now law « the visible hand[…]…

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