Louisiana

Property Classification

Bona fide agricultural, horticultural, marsh, and "timber lands", as defined by general law, shall be assessed for tax purposes at 10% of "use value" rather than fair market value.

Timberland - is land stocked by forest trees, but also includes land having a tree cover within the last three years and not currently developed or being used for nonforest purposes and devoted to the production of timber and timber products, and land under contract with a state or federal agency restricting its use to timber production (Sec. 47:2302(D), La R.S.).

In order to be classified as a bona fide agricultural, horticultural, marsh or timber land and assessed at its use value it must meet the definition of bona fide agricultural, horticultural, marsh or timber land and:

A. Be at least three acres in size, or have produced an average gross annual income of at least two thousand dollars ($2,000) in one or more of the designated classifications for the four preceding years, and

B. The landowner has signed an agreement that the land will be devoted to one or more of the designated uses as defined in Section R.S. 47:2302.

Classification of timberland - Timberland is classified into 4 classes:

Class I: timberland capable of producing more than 120 cubic feet of timber per acre per annum.

Class II: timberland capable of producing more than 85 but less than 120 cubic feet of timber per acre per annum.

Class III: timberland capable of producing less than 85 cubic feet of timber per acre per annum.

Class IV: timberland capable of producing less than 85 cubic feet of timber per acre per annum and which is subject to periodic overflow from natural or artificial courses, and which is otherwise considered to be swampland.

Assessment and Valuation:

Use value - Use value of bona fide agricultural, horticultural and timber lands means the highest value of such land when used by a prudent agricultural, horticultural or timber operator for the sole purpose of continuing the operation, as a commercial agricultural, horticultural or timber enterprise, of an existing bona fide agricultural, horticultural or timber use.

Application - A landowner must file an application for a use value assessment with the assessor in the parish or district in which the property is located. Until January 1, 2000, renewal applications must be filed at least every four years. Effective January 1, 2000, applications for use value assessment other than in Orleans Parish and Jefferson Parish are permanent as long as the property remains eligible for use value assessment. Applications in Orleans Parish and Jefferson Parish still must be filed at least every four years.

In the event of the sale of any property subject to use value assessment, the purchaser must file a new application for use value assessment within 60 days from the date of sale. When the use value ceases, the owner must notify the assessor within 60 days.

Determination of use value:

Use of bona fide timberland shall be determined by the following formula: (Sec. 47:2307)

Use Value = (net income / capitalization rate) x 10%

The actual tax per acre is determined by multiplying the "use value" by the local millage rate.

Range of productivity - Productivity of timberland shall be determined by reference to the U.S. Forest Service Periodic Surveys and the U.S. Soil Conservation Service Woodland Classifications. Each class of timberland is assigned an average cu. ft. of growth/acre/year.

Net income - Net income shall be determined by multiplying the annual cubic foot growth per acre for timber in each of the four classifications times the value per cubic foot of timber stumpage as derived from the severance tax returns and reported by the Louisiana Tax Commission or its successor less the management cost.

The gross return and the management cost shall be based upon weighted averages for timber produced in Louisiana for the four-year period immediately preceding the year in which the table is prepared, as determined from figures furnished by the Louisiana Tax Commission and the Louisiana Forestry Commission.

Capitalization Rate - The capitalization rate shall never be less than ten percent.

In determining the use value of lands classified as Class IV timberland, the Louisiana Tax Commission or its successor shall use the net income figure employed in determining the use value of Class III timberland; but shall adjust the capitalization rate upward so as to appropriately reflect the low productivity of lands falling within classification IV as a result of overflow and siltation conditions.

There is an annual tax of eight cents per acre on each acre of timberland in the state to be paid by the owners known as the forest protection tax. Timberland means bona fide timberland being assessed at its use value (Sec. 3:4321, La R.S.).

This tax is in addition to the assessment of timberland at its use value. The monies in the fund shall be expended by the Department of Agriculture and Forestry for the acquisition and maintenance of equipment for the protection of forest lands from damage by fire or other causes and only in the amounts appropriated annually by the legislature.

Taxes are levied upon all natural resources severed from the soil or water, including all forms of timber, including pulp woods, and turpentine and other forest products (Sec. 47:1952.1, La R.S.);

Timber stumpage values

The Forestry Commission and the Tax Commission determined the following timber stumpage values based on current average stumpage market values to be used for severance tax computations for 2020:

Product	Value Per Ton	Tax Rate	Tax Per Ton
Pine Sawtimber	$31.98	2.25%	$0.72
Hardwood Sawtimber	$35.00	2.23%	$0.78
Pine Chip - N - Saw	$16.87	2.25%	$0.38
Pine Pulpwood	$9.25	4.97%	$0.46
Hardwood Pulpwood	$8.50	5.06%	$0.43

All other forest products (ties, poles, piling, veneer logs, etc.) to be computed by weight or scale.

Source: Louisiana Department of Revenue, 2020

Exemptions:

Standing timber - Effective June 24, 1998, "local taxing jurisdictions" are prohibited from imposing property tax on timber, or the right to cut, remove, or use standing timber, regardless of the ownership of the timber or its classification as a separate immovable under Civil Code Art. 464 (Sec. 47:643.1, La R.S.).

• Louisiana Department of Revenue. Severance tax values for timber products. http://revenue.louisiana.gov/LawsPolicies/RIB%2020-003%202020%20Severance%20Tax%20Values%20for%20Timber%20Products.pdf