|
PROPOSED BILL WOULD SIMPLIFY TIMBER TAXES
Sen. Jeff Sessions Introduces Timber Tax Simplification Bill
WASHINGTON, D.C. -- Sen. Jeff. Sessions (R-Ala.) introduced the Timber Tax Simplification Act of 2003, May 1, which would allow more timber owners to be eligible for lower capital gains tax rates. " Modern timber harvesting techniques have been good for the environment, but the tax code hasn't kept up with the changes," Sessions said. "This modest change in the law will allow timber owners to get more timber to the mill without paying unnecessarily high tax rates on their harvest." Section 631(b) of the Internal Revenue Service Code requires timber owners to select either the "lump sum" or the "pay-as-you-cut" method of harvesting. Currently, most owners select the "pay-as-you-cut" method in order that their sales will be taxed at the lower capital gains rates. When owners use the more desirable "lump sum" cutting method, they pass the risk of damaged or diseased timber to the buyer, as well as the risk of fire and insects. This method also allows the seller to receive payment up front, but they are taxed at the higher income tax rates. It is clear that most professional timber experts favor the "lump sum" sale because it produces the highest bid for the timber and shifts the risk of loss to the buyer. According to two analyses by the Congressional Joint Committee on Taxation, this modification would result in a negligible change in revenue. The Forest Landowners Association, the Forest Landowners Tax Council, and the Forest Industries Council on Taxation all support the legislation. Similar legislation sponsored by Sessions passed Congress in 2000, but it was included in a larger tax bill that was vetoed by President Clinton. The veto was unrelated to the timber tax provision.
|
More Headlines...
