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Tax Reform and Christmas Tree Profits in the Lake States

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The Tax Reform Act of 1986 had a large impact on the profits of Christmas tree growers. Growers have significant costs for at least 7 years before they realize any returns. Prior to the Tax Reform Act, 60% of these returns were exempt from federal income tax if they qualified as long-term capital gains. Currently 100% of these returns are subject to taxation. Using a comprehensive survey of production costs of Michigan Christmas tree growers, this study found that after-tax rates of return dropped from 41% down to 31.6% for Scotch pine on an 8-year rotation. Other species and rotation showed corresponding decreases. North. J. Appl. For. 7:89-91, June 1990.
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Document Type: Journal Article

Affiliations: Department of Forestry, Michigan State University, 126 Natural Resources Building, East Lansing, MI 48824

Publication date: 1990-06-01

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  • Each regional journal of applied forestry focuses on research, practice, and techniques targeted to foresters and allied professionals in specific regions of the United States and Canada. The Northern Journal of Applied Forestry covers northeastern, midwestern, and boreal forests in the United States and Canada.
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