OREGON TAX DEFERRAL INCENTIVE PROGRAMS
The State of Oregon through the Dept. of Revenue and county assessor offices have several tax incentive programs to help rural Oregonions keep their land in farm and/or forest production. Bigleaf maple can be managed for both agriculture (e.g., sap for maple syrup, spring flower blossoms) and forest products (firewood, hardwood flooring). This brief points out a few potential tax opportunities for you to explore, but for expert advice contact your personal account, the county assessor's office, and/or the Oregon Dept. of Revenue Property Tax Division. To prepare, get a map of your property, make a list of different products you are or want to produce from specific sections/portions of your property, and include revenue estimates or goals for each product.
Special assessment programs that are available to most landowners
Farmland in an Exclusive Farm-Use Zone
Farmland Not in an Exclusive Farm-Use Zone
Small Tract Forestland Program
Wildlife Habitat Conservation Management Program
www.dfw.state.or.us/lands/whcmp/map_participants.pdf (participating counties)
A few key points to consider...
Each county sets their own zones & valuation tables (real market value, special assessed values, & maximum special assessed values) for farm special assessment and each may be different; For forestland, the county sets the real market values and the Oregon Dept. of Revenue sets the special assessed value and maximum special assessed values.
Any section/portion of land may qualify for a special assessment, but there are certain circumstance that may prohibit a property to qualify for special assessment (ORS 215.236);
A property may have different types of assessments on different specific portions, but cannot have different assessments that apply to the same specific portion. If you have multiple products produced on a specific portion (e.g., timber, sap for syrup), it’s likely you will want to choose the program that offers the largest tax break;
Different assessment types have different burdens of proof. For example, the Non-Exclusive Farm-Use special assessment program currently requires the gross income of $100 an acre, minimum $650, maximum $3,000 (ORS 308A.071). For example, a tract with 2 acres will need to generate $650 gross income every 3 out of 5 years, while a tract with 40 acres will have a gross income of $3,000 every 3 out of 5 years. The requirements vary by acreages, years, and other factors such as the period of maturation for perennial crops (e.g., bigleaf maple for sap production). In the event income requirements are not met in the non-EFU program, the landowner may be disqualified from the program and an additional tax (up to 5 years) may be calculated. In an EFU program there is no income requirement, but the land could be disqualified from the program and an additional tax (up to 10 years) assessed if product production stops;
Sales of maple food products may be used to meet the income requirements of the non-EFU program, but firewood and timber cannot.
Written by: Eric T. Jones, FES COF OSU (in consultation w/ODR) v07.31.2021