Mississippi Society of American Foresters

MS SAF Position Statement on Timber Severence Tax

Position:

The Mississippi Society of American Foresters recognizes that the Mississippi timber severance tax was established over 60 years ago, in part, to provide revenues for state forestry programs promoting sound forest management. MS SAF recognizes that the current rates of the timber severance tax have not kept up with rising timber values and that the categories of the code are antiquated and should be updated to reflect the modern forest products industry. A more efficient, modernized severance tax system could also provide improved funding and harvest information useful for long-range economic planning in forestry. It is the position of the Mississippi Society of American Foresters that now is the time for the Mississippi timber severance tax code to be updated.

Background:

Timber severance taxes currently exist in 12 states and 8 southern states including Mississippi. Historically, the levy of timber severance taxes began in 1922 in Louisiana. The historical justification for timber severance taxes was to discourage wasteful cutting of timber and to provide revenues for state forestry programs that promote sound forest management practices.

Mississippi's timber severance tax was established in 1940. It has been modified periodically. The last change in the timber severance tax was in 1996 to add tax rates for timber sold by weight resulting from an update of the weights and measures statutes that establish rules for timber commerce.

Mississippi's timber severance tax code contains 13 separate categories in which tax may be paid. Many of these categories are outdated such as "turpentine gum" and "stumpwood" which are no longer forest products in Mississippi. In addition, the rates of tax are so low as to be insignificant. The current rate of tax in Mississippi is $1.00 per thousand board feet or $0.12 per ton for pine sawtimber and $0.30 per cord for pulpwood. At current delivered prices for pine sawtimber, this comes to one-third of one percent.

With state forestry programs in need of funding, it appears that an update of the timber severance tax code in Mississippi is appropriate. If the tax code were updated it could be modernized and generate funds to support needed forestry programs which was an original intent of a timber severance tax.

In addition, an updated timber severance tax code could be structured in such a way as to provide more valuable resource harvest information to compliment inventory information to give a clearer picture of the status of Mississippi's forest resources on a continual basis.

Originally adopted by Mississippi Society of American Foresters (MS SAF) on December 11, 2003 and revised on October 9, 2012 and December 4, 2012. This statement will expire December 31, 2017, unless revised by the MS SAF.