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- Info
Impact of state income taxes on timber investments
| Author: |
Holley, D. Lester, Jr. |
| Date: |
1988 |
| Periodical: |
In: Hamel, Margaret P., ed. Forest Taxation: Adapting in an era of change. Madison, WI: Forest Products Research Society |
| Abstract: |
The major objectives of federal tax reform were to broaden the tax base by closing loopholes and lowering federal tax rates. If affected states accept the resulting increase in adjusted gross income without lowering their tax rates, a considerable state tax increase will result. There is currently much speculation about which states will keep the windfall and which will return it to the taxpayer. A lowering of individual state tax rates will help timber investors, but probably won't make up for the loss of the 60 percent capital gains exclusion. Although a number of states have announced changes in their tax system to conform with the new 1986 Federal Revenue Code, no clear pattern has yet emerged. The situation bears watching by timber interests, and a full-scale analysis should be undertaken when the dust settles. In light of the tax increase on timber in 34 states that will tend to discourage timber investments, some state legislatures may be particularly sympathetic at this time to special legislation to encourage timber growing. |
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