CONCORD – Heading into prime logging season, the New Hampshire Department of Revenue Administration is increasing education efforts for landowners, municipalities and loggers to help them understand and follow New Hampshire’s laws and regulations regarding logging and timber harvesting.

The DRA recently developed and introduced a guide on New Hampshire’s Timber Tax, which is accessible on the DRA website. The guide provides an overview of the tax and how it is assessed, while also providing links and directions to forms and resources.

Forestry is New Hampshire’s oldest land-based industry, dating back to the 1600s. According to the University of New Hampshire Cooperative Extension’s most recent Forest Products Industries’ Economic Contribution report, the state’s forest products industry generates more than $1.6 billion annually in direct economic impact and sustains more than 7,000 jobs. With more than 80 percent of the Granite State covered by trees, the total economic output from our forests from direct, indirect and induced economic impact, and from forest-based recreation exceeds $2.5 billion. Although logging occurs year-round, winter is traditionally when loggers are most active.

“It is critically important that the DRA ensures all its stakeholders and customers are educated and informed of all applicable taxes, laws, and regulations. The Timber Tax impacts a relatively limited number of taxpayers but continues to play an essential role in responsible timber reporting, assessing, and harvesting,” said DRA Commissioner Lindsey Stepp. “As part of our oversight role with the Timber Tax, the DRA is here to be a resource providing assistance and guidance at any phase of the process to landowners, loggers, foresters and municipalities throughout New Hampshire, and this Timber Tax guide is a perfect example of how we are always looking to engage and inform our stakeholders.”

In 1949, New Hampshire legislators enacted a Timber Tax “for the purpose of encouraging conservation of the forest resources of the state.” Each municipality is responsible for assessing the Timber Tax on the landowner of the property from which the lumber is harvested. The Timber Tax is set at 10 percent of the “stumpage value,” the value of wood, measured per thousand board feet of saw logs or tons of pulpwood, at the time of cutting.

The DRA collaborates with municipalities, landowners, loggers foresters as well as the New Hampshire Department of Natural and Cultural Resources, to oversee the tax application, administration, and enforcement. Unlike other taxes, New Hampshire state government does not collect money from the Timber Tax. Instead, the collected funds remain with the municipality where timber was harvested. Since its inception, the Timber Tax has generated significant revenue for municipalities statewide.

The DRA’s Timber Tax guide also details regulations, as well as penalties and fines, for noncompliance. One penalty known as “doomage” provides that the municipality may assess two times what the tax would have been if the report of wood cut had been filed accurately and on time. In October, the New Hampshire Department of Justice successfully prosecuted a case in southern New Hampshire where a logger was found guilty of tax evasion and perjury after underreporting timber harvested to evade the Timber Tax. That logger received a prison sentence and was ordered to pay restitution of more than $45,000.

The DRA has several resources for landowners, municipalities, and loggers on its website. The DRA Timber Tax page features details on how the Timber Tax is assessed, necessary forms, a series of Frequently Asked Questions, guidance for municipalities in administering the Timber Tax, and links to partner organizations, including the New Hampshire Timber Owners Association and the New Hampshire Department of Natural and Cultural Resources. Loggers, foresters, landowners and municipalities can also call 603-230-5950 or email timber@dra.nh.gov for assistance.