tree growth tax

Maine Forest Service Assistance Programs

I just attended an educational class on forestry issues taught by State Foresters Terri Coolong and Oliver Markewicz. This informative session covered topics of the Maine Tree Growth Tax Program, Maine Forest Practices Act including liquidation harvest laws, foreign investment in agriculture land rules and other information.

I believe it is a little known fact that the Maine Forest Service can provide free technical information to those who own forestland in Maine or those considering purchasing it. Maine has 10 district foresters who cover our state offering services ranging from educational programs to limited one on one contact with individual owners.

The district forester will help you understand sound forestry practices that when implemented should add long term value to your land investment. A one on one session can give you a better understanding of your land and should help you be more informed when working with an independent forester to formulate a forest management plan. To find the district forester who covers the town your property is located check out the link here to The Maine Forest Service.

Comments

  1. Peter McPhail on

    Our district foresters are a great resource for anyone who is looking to buy land in Maine and is new to owning Maine land!!
    • Mike on

      Great information for timberland owners in Maine. Thanks
      • Amanda on

        Great article & tips!

        Maine Current Use Tax Programs

        Maine has four current use programs to reduce taxes on land that is used primarily for a specific purpose. The four programs are tree growth, open space, farmland, and working waterfront. The following is a brief explanation of each program with links to guide you to more detailed information.


        Tree Growth Tax Law 
        The most commonly used current use tax program in Maine is the Tree Growth tax program. It may also be one of the most misunderstood. The basis of the program is to assess land of 10 or more acres based on its productive use as commercial timberland. Growing and harvesting must be the primary use.
        During 2017, Maine’s Tree Growth tax program came under the scrutiny of the governor’s office as did most 
        property tax reductions. It is believed, and probably rightly so, that a significant percentage of the properties enrolled in this program may not be in compliance with the law. In order to be in compliance, your forest management plan needs to be up to date and implemented. If you have purchased forestland in Maine and you have never talked with a licensed forester you may already be out of compliance. Bulletin 19 on the state website provides information for those already in the program and those considering enrolling. The link below is bulletin 19 
        Bulletin 19 

        Farmland Tax Law
        This tax law requires the land to be used for agricultural or horticultural purposes and must be of 5 or more contiguous acres. The land must earn at least $2,000 gross income per year to 
        qualify. The owner must file an income statement with the assessor by April 1 of each fifth year, after qualification, for the previous 5 years income of the owner or lessee.
        The assessor can use a number of factors to determine farmland values for current use 
        including farmer to farmer sales, soil types, land rents, and others. For additional information on this tax law see Bulletin 20 link

        Bulletin 20                                                        

        Open Space Tax Law
        This program provides for a reduced assessed value based on the property being preserved or 
        restricted for a public benefit. Qualifying public benefits include recreation, scenic resources, game management and wildlife habitat. The open space program does not have a minimum 
        acreage requirement. In open space the tax assessor will reduce the value by either researching sale data of parcels all or partially in conservation or preservation and computing a fair value, or by applying a percentage reduction based on the public benefit or benefits being applied. The reduction, depending on the benefit, can be as high as 95% of the assessed value. See Bulletin 21 at this link. 

        Bulletin 21

        Working Waterfront
        Land that qualifies for this current use tax treatment is for land on tidal waters or in the 
        intertidal zone used at least 50% for access or support of commercial fishing activities.
        The assessed value reduction varies from 10%, 20% or 30% depending on the percentage of use and potential deed restrictions for use. See all the details on the state site for Working Waterfront Q&A at: https://www.maine.gov/revenue/forms/property/pubs/workingwaterq&a.htm

        Moving Sideways 
        If you desire to change the use of your property under any of the first three laws above you can avoid any penalty for that change of use. Property changed from farmland to open space, farmland to tree growth, open space to farmland, or open space to tree growth will not be 
        penalized if a parcel also meets eligibility requirements of the new classification.