Forest Products Tax

The Forest Products Tax is contained within the Code of Virginia Title 58.1 –Taxation, Chapter 16, 58.1-1600-1622. The forest products industry has agreed that every business engaged as a primary manufacturer, or as a shipper of logs out-of-state, must pay the severance tax.

As a “severance tax” the Code of Virginia states that the General Fund will match every dollar of severance tax appropriated to the Reforestation of Timberlands (RT) Program. However, the General Assembly has only budgeted a “full match” in three of the last 14 years.

Tax Rates and Distribution

  • $1.15 per 1000 feet B.M. of pine lumber and 1000 board feet of pine logs. For every $1.15 collected, $1 is appropriated to the Reforestation of Timberlands Program.
  • $0.475 collected per cord of pine pulpwood. For every $0.475 collected, $0.40 is appropriated to the RT Program. The remainder of the tax on pine and all the tax on hardwoods is appropriated to the Virginia Department of Forestry for protection and development of the forest resource.

There are optional tax rates for lumber manufacturers of less than 500,000 feet per year.

Who Pays the Tax?

The tax is paid by operators of sawmills, veneer mills, paper mills, chip mills, chemical plants or other operations which process Virginia-grown roundwood into other products. The tax also applies to operators who purchase and ship Virginia-grown forest products outside the state in an unmanufactured, roundwood form. Loggers who sever timber from the stump could be included in this group.

The tax does not apply to individual owners of timber who occasionally sever timber from their own premises, and use it in construction or repair of their own structures, or for their own consumption.

What Gets Taxed?

  • Lumber
  • Timber purchased and shipped out-of-state as roundwood
  • Logs converted into veneer
  • Pulpwood
  • Chips manufactured from roundwood
  • Railroad crossties
  • Posts, mine ties, and other types of timber used in mining
  • Pilings and poles
  • Keg staves
  • Any other type of forest product that is severed from the stump

When Does the Forest Products Tax Get Paid?

Taxpayers should file a return with the Virginia Department of Taxation quarterly. If the returns are not filed, the Department of Taxation may assess taxes due, plus penalties and interest.

Filing is made on Form 1034, Forest Products Tax Return, which may be accessed online in the Commodity and Excise Taxes dropdown box under Down Load Forms.

For further information about the Virginia Forest Products Tax, contact:

  • Virginia Department of Taxation
    Customer Services Section
    PO Box 715
    Richmond VA 23218-0715
  • Dean Cumbia
    Virginia Dept. of Forestry
    900 Natural Resources Drive
    Suite #800
    Charlottesville VA 22903

Last modified: Thursday, 06-Nov-2014 10:20:04 EST