Skip to main content

The Impact of Federal and State Income Taxes on Timber Income in the Northeast and Midwest Following the 1986 Tax Reform Act

The full text article is temporarily unavailable.

We apologise for the inconvenience. Please try again later.

The structure and provisions of state income taxes are detailed for timber owners in 19 states of the Northeast and Midwest. Using 1994 federal and state income tax rules, the tax liability for a hypothetical married couple with timber sale income was calculated for two federal income tax rate brackets (medium and high income levels) for states in the Northeast and Midwest that impose an income tax. At the medium income level, the state portion of the total income tax liability ranged from 12.7% in Pennsylvania to 25.6% in Delaware. At the high income level, the state portion ranged from 11.1% in Pennsylvania to 24.9% in Minnesota. For both income levels, New Hampshire had the lowest state portion of the total tax liability when considering their business profits tax (12% for the medium and 7% for the high income level). The provision most significantly affecting state income tax liability was the tax rate schedule. Installment sales provide an alternative tax planning strategy for those timber owners who qualify as investors rather than a business and who are in the lowest federal tax bracket. Several states also impose taxes other than an income tax when timber is harvested. For example, Minnesota and New Hampshire both impose a minimum 10% yield tax on the timber's stumpage value. These levies significantly affect the total tax liability on harvest income. North. J. Appl. For. 13(1):8-15.
No References
No Citations
No Supplementary Data
No Article Media
No Metrics

Document Type: Journal Article

Affiliations: Department of Accounting, Virginia Polytechnic Institute and State University, Blacksburg, VA 24061

Publication date: 01 March 1996

  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more