Reforestation of Timberlands Board
Sub-Committee on Tax Form Modification

Thursday, September 16, 2004
Virginia Forestry Association
3808 Augusta Avenue
Richmond VA 23230

The meeting was called to order at 10:00 AM by Ann Duff.

Present were: Ann Duff, John Goode, Robert McFarland, Dr. Michael Mortimer, Ed Zimmer, Jim Green, Thomas Jefferson III, Dean Cumbia, David Slack, Jim Bowen and James Starr.

Ann Duff reviewed the Anti-Trust Statement.

Ann reviewed the purpose of the meeting, which was to simplify the procedures to pay the severance tax, thereby encouraging more firms to pay the tax. The purpose is not to raise the tax.

James Starr and Jim Bowen reviewed the history of the RT program and tax.

Ann lead a discussion of the products listed in the code section 58.1-1604.

1. The group felt item #1 was alright except, there needed to be a clarification if the products measure was input or output.
2. The group felt item #2 was alright except, there needed to be a clarification if the products measure was input or output.
3. The International ¼”Kerf Rule is stated in the law for unit of measure but no one uses that. he Doyle Rule is usually used for measuring board feet or use cubic feet.
4. Same concern as number 3 above.
5. Products including excelsior wood, chemical wood, bolts and billets, and tanbark could be removed since they are no longer produced in the state. Consider adding engineered wood products.
6. The rate of per 100 pounds should be changed to per short ton (2,000 pounds). The payment rate of 0.986 cents and 0.234 cents should then be adjusted.
7. Leave this one as it is.
8. We need to know the number of products and income from these products. Preliminary information indicates less than one percent of the tax comes from these products and consideration could be given to removing them.
9. We need to know the number of products and income from these products. Preliminary information indicates less than one percent of the tax comes from these products and consideration could be given to removing them.
10. We need to know the number of products and income from these products. Preliminary information indicates less than one percent of the tax comes from these products and consideration could be given to removing them.
11. We need to know the number of products and income from these products. Preliminary information indicates less than one percent of the tax comes from these products and consideration could be given to removing them.

Mr. Jefferson suggested changing the code to a base tax on input rate per tons for pine or other species, i.e. 20 cent per ton. This would be the simplest option.

We need to calculate the impact, on the producer and income, of any suggested change in the tax rate.

Ann Duff summarized the discussion into options:

1. Leave the rates as they are and clarify if the measure is input or output and delete obsolete products.
2. Establish a rate per ton on all products based on input and one rate for all pine. Conversion rates would have to be developed.
3. Leave the option to pay by input or output on pine or hardwood.

Starr suggested that Mr. Jefferson’s suggestion, option # 2, is really the only one that would simplify the code and the process for paying the tax.

Some do not like the “per piece”measure and prefer weight or volume option and conversion factor for each product.

The question was asked if this tax could be filed electronically. Staff will research that issue.

The Escrow account was discussed. Several felt reserving 50 percent of the tax generated in a county should be held for that county for two years, before being used elsewhere.

James D. Starr, Director Forest Management

Last modified: Friday, 07-Mar-2008 19:13:52 UTC