| | American Forest Foundation announces 2009 Research Grant recipient for comprehensive study on tax policy and family forests
Property taxes and keeping land in tact for heirs are of highest concern to family forest owners. Since tax policies can lead to conversion of forests to non-forest use, understanding tax policies is of critical importance to forest conservation. To address this research gap, the American Forest Foundation announced today funding for the Family Forest Research Center at the University of Massachusetts to compile an up-to-date, comprehensive understanding of existing tax policies and programs across the country. The research, awarded through a competitive process, will help AFF advance policies that help family forest owners stay on the land.
In the United States, about 35% of the forestland is owned by 10 million family forest owners. Most of these owners hold relatively small tracts of land; however, their collective management behavior has an enormous impact on the sustainability of the nation’s forests. A wide range of policy tools have been adopted to encourage sustainable family forest management, including technical assistance, outreach education, financial incentives, regulations, as well as public ownership. Among these policies and programs, financial incentives, particularly tax incentives, play a prominent role. Tax incentives include reduced property, estate and inheritance taxes, favorable tax credits and deductions, favorable capital gains treatment of timber income, as well as incentives linked to specific stewardship practices such as wildlife protection, recreation, and reforestation.
No published studies have previously documented, analyzed, or compared various types of tax incentives simultaneously across various levels of government. The project, led by Dr. David Kittredge of University of Massachusetts and Dr. Brett Butler of the US Forest Service, will undertake a three pronged approach to understanding tax policy for family forest owners: 1) review and compare existing state and local family forest tax policies in all 50 states, 2) analyze the historic and projected impacts of tax policies on family forest owners, and 3) identify tax policies that would best encourage keeping family forests as forests and increasing sustainable forest management.
The research will include document review, data verification, phone interviews, and regression analysis. The results will be incorporated into the Yale Forest Forum, where policy makers, program administrators, and researchers will discuss optimal tax policies for family forest owners. The recommendations of the forum will be published in a small booklet to be delivered to legislators, legislative staffs, and policy analysts. The unique research will provide a much-needed window into an important and pressing issue facing family forest owners. Kittredge comments, "It is all too easy for people to focus on what happens in their own states, and lose sight of what might be working well elsewhere. We're excited by AFF's leadership in identifying this as an important topic to pursue.” The research results will be compiled and disseminated through the booklet, white paper, journal articles, and fact-sheets, all in a coordinated effort to inform tax policy affecting family forest owners. Senior Vice President for Conservation, Drue DeBerry adds, "Local tax policies can have a huge impact on forest owners' bottom line. This research will help AFF identify promising policies that help keep family forest owners on the land." The research will be completed by the end of 2010.
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