State and Federal Tax Incentives

State - Land Tax Incentives

Many private land owners are eligible for the forest land tax deferral program supported by the state of North Carolina. The tax deferral program was originally set up to reduce land taxes for farmers on land that was forested. This program can save forest landowners up to 85 percent on annual land taxes for their forested property. To be eligible for the deferral a landowner must have a forest management plan drawn up with the intentions on growing a crop of timber on land that is capable of producing marketable timber.

Federal - Tax Incentives

Small private landowners, who own the majority of forest land in this country, don't have the funds to make the investment in reforestation. For this reason the federal government has implemented a forestry incentive program to help reduce income taxes. This is offered to private landowners planting trees and to help with timber stand improvements. One example is that over a period of years your taxes can be reduced by claiming an investment credit and deduct the reforestation expenses. A forester can draw up a management plan and submit the necessary documents.

Assistance Programs

Private landowners control 80% of commercial forest land in North Carolina and 58% of the total commercial forest land in the country. Half of this land is not being utilized up to its potential. The government has developed forestry assistance programs to help private landowners be eligible for up to 40 % reimbursement for the expense in establishing a new forest. Reimbursements include tree planting (seedling expenses), work needed to prepare the land for planting and also releasing desirable trees from competing vegetation. Eligible practices must be included in a forest management plan. Land owners can not receive both state and federal cost share assistance on the same acre of land for the same practice.