Forest Tax Law Program History

Early property tax policy in Wisconsin required woodland owners to pay higher taxes on their lands. This policy was a financial burden on woodland owners and in many instances, landowners overcut their timber to pay their tax obligation. The negative effect of overcutting prompted state authorities to enact forest tax laws to promote timber growing. There have been 3 different programs enacted over the years but only one is still taking new signups. The purpose of all of Wisconsin Forest Tax Laws has been to encourage proper forest management on private lands by providing property tax incentives to landowners. This is accomplished with a binding contract between the state Department of Natural Resources and private landowners.

Lands entered under the forest tax laws have written management plans that landowners must follow. Contract length varies with each law and can run for periods of 15, 25 or 50 years depending on which law and the year lands are entered. All Forest Tax Laws have stringent requirements and failure to follow the contract can lead to substantial penalties. The management plans which are approved by the landowner and the DNR forester may include harvesting and thinning timber, tree planting, erosion control, and wildlife measures.

In 1927 a Constitutional Amendment to allow an exception from uniform taxation for forest lands was adopted. The Forest Crop Law (FCL) was enacted the same year for large forest owners. The focus was long-term protection from development and subdivision; all contracts were 50 years in length. Initially the annual FCL acreage share payment was set at $0.10/acre.

Recognizing the importance of small farmland woodlots, in 1954 the Woodland Tax Law (WTL) was enacted to provide a forestry incentive program for owners of farm woodlots not large enough for FCL participation. The targeted land was owners of 40 acres or less of forested land. The program issued 10 contracts and did not allow landowners to voluntarily withdraw. The only way for a landowner to leave the WTL program was to use the land for a non-forestry purpose or to otherwise violate the law. Even then, no penalties were levied. The annual acreage share payment is $ 0.20/acre.

Since 1985 the FCL and WTL were repealed, and the Managed Forest Law (MFL) was enacted. Today the WTL is no longer available to landowners and no new entries are allowed under FCL. Currently about 26,000 landowners, owning more than 2.6 million acres, are enrolled in the two existing forest tax laws: Forest Crop Law (FCL) and Managed Forest Law (MFL).

The Managed Forest Law, enacted in 1985, is attractive because of the flexibility and many benefits it offers. It combines some characteristics of both the FCL and the WTL. Landowners have the option to choose a 25 or 50 year contract period. Enrollment is open to all private landowners owning ten or more acres of woodlands.

Wooded parcels must be at least 10 acres in size to qualify for entry into the Managed Forest Law if the owner agrees to an approved forest management plan. Present contracts under the FCL will continue until expiration. Up to 80 acres can be designated as "closed" to public access per ownership per municipality (town/village). To meet the growing needs of the public for recreational land, the public allowed to hunt, fish, hike, cross country ski, and sightsee on lands designated as "open". Acreage fees paid to close the land to public access are higher than on "open" acres. Initial acreage share rate set at $0.74 and initial closed acreage fee set at $1.00. Recalculation to be done every fifth year thereafter with adjustments used in the following year.

The requirement of a forestry plan still exists and has expanded over the years to address many non-timber issues such as soil erosion, wildlife management, endangered species, recreation, and water quality. These management plans must meet certain strict legal requirements, but also must take into account the landowners goals and objectives as well as the capacity of the land itself. These changes recognize the needs of society as well of the individual owners.