Would 480-a work for you and your woodlot?

Kris Brown Wednesday, 09 September 2020

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A forester once told me that people tend to glaze over, perhaps even startle themselves awake with their own snoring, when the conversation shifts to New York’s Forest Tax Law Program, otherwise known as 480-a. There is certainly a lot to know in terms of eligibility and program requirements, potential benefits, drawbacks, and even penalties. In its simplest sense, 480-a represents a way for landowners with 50 or more contiguous forest acres to reduce the property taxes they pay on their forestland in exchange for a commitment to the long-term conservation and management of their woods. So, what would give you the initiative to dig into the fine print about 480-a? I think the answer could be: having enough knowledge about the program to envision how it might support the values and objectives that you have for your woodlot.

Based on our Conservation Awareness Index survey of nearly 800 New York City (NYC) Watershed landowners, 68% reported that they had “Not heard of” or knew “Nothing at all” about 480-a. This is significant because high property taxes, among other factors (like age/physical limitations or simply needing money), can drive landowners to subdivide and sell their land, which can lead to fragmentation and loss of forestland. The purpose of this blog is simply to increase awareness about 480-a. Ideally, it will encourage eligible landowners to explore the program more deeply to determine if it is a good fit for their woodlot/situation.

New York State’s Forest Tax Law Program (480-a) was enacted in 1974 to provide a steady flow of wood for the forest products industry. By enrolling in 480-a, a landowner is committing to the long-term management of their woods to produce a continuous forest crop. In return, they can exempt up to 80% of the assessed value of the enrolled acreage from property taxes. It is a rolling 10-year commitment, so each year that a landowner receives a tax benefit, they are committing to another 10 years of forest management. There is a lien on the property deed, so the 480-a rules and regulations would apply to the next forest owner.

Based on a review of the resources listed below and from interviews with consulting foresters and 480-a participants, I will attempt to summarize the benefits and potential drawbacks of 480-a. Hopefully, this list will help to get you thinking about how 480-a might work for your own situation.

Benefits

  • Keeps forests as forests, which provide ecosystem services like water purification, flood regulation, food, wood, fiber, fuel, wildlife habitat, and recreation
  • The tax break (i.e., exemption of up to 80% of the assessed value of the enrolled acreage from property taxes), which could be substantial if you own a large woodlot and/or have high property taxes
  • A forest management plan that incorporates your woodlot values and objectives. In this sense, 480-a could be a great fit for landowners that are highly engaged with their woodlots through projects like marking property boundary lines, enhancing wildlife habitat, and doing timber stand improvements (TSIs) to support commercial species.
  • A source of income generated from timber harvesting with the assistance of a private consulting forester and a state forester

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Boundary line maintenance is a regularly scheduled activity in the forest management plan, occurring once every five years.

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Non-commercial timber stand improvement (TSI) work clears space and frees up resources (i.e., light, nutrients, and water) to help commercial tree species grow. TSI work is also a regularly scheduled activity in the forest management plan. Yes, it looks messy, but the animals LOVE IT!

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The primary goal of the 480-a program is to provide a continuous wood supply for the forest products industry. Logging also provides a source of income for landowners.

Potential problem areas

  • Long-term commitment with annual reporting requirements to the NYS Department of Environmental Conservation (DEC)
  • Continuous schedule of activities as outlined in the forest management plan
  • Staying on schedule may be more difficult if you live far away from your woodlot
  •  TSI work (e.g., cutting non-commercial beech trees to make way for sugar maple, red maple, and red oak generation) that results in “messy” woods due to the lack of a market for low-grade wood. Note that this “mess” can result in some great wildlife habitat.
  • Steep penalties for not following the plan or complying with regulations. For example, 2.5 to 5 times the tax savings, plus interest, for up to the past 10 years you’ve been enrolled in 480-a
  • If you wish to get out of the program, you must carry out the activities as outlined in the plan for 10 years with no tax breaks to avoid penalty. Note that one way to get out of 480-a gracefully if you live in the NYC Watershed is to sell your land to the NYC Department of Environmental Protection (DEP).
  • A 6% stumpage tax must be paid to the county treasurer for commercial harvests
  • Some towns have special regulations regarding timber harvesting
  • Some of your tax savings could be shifted to neighboring landowners

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I talked to a landowner that got out of 480-a immediately and without penalty by selling his land to the NYC DEP. It is now a public access, Watershed recreation/water supply land. NYC DEP has 135,000 acres of these parcels in the Watershed.

There, I put it all out there as I understand it. Now it’s your turn to see what 480-a means for you. You could:

  1. Go to MyWoodlot.com and check out 480-a-related resources
  2. Visit DEC’s website and watch this webinar, Review and Discussion of 480a Forest Tax Law
  3. Contact a Master Forest Owner near you for free advice
  4. Contact a State Forester near you for free advice

Special benefits for NYC Watershed Landowners

If your woodlot is located in the NYC Watershed (click here to find out) and it qualifies for 480-a, The Watershed Agricultural Council (WAC) Forestry Program offers an enrolment incentive that pays approved landowners $491.73, plus $6.01 per acre of forestland that they enroll in the program. This incentive helps to offset the cost of hiring a private consulting forester to provide you with a forest management plan, which is a 480-a enrolment pre-requisite.

As 480-a requires a forest management plan update every five years, the WAC Forestry Program also offers an update incentive to approved landowners in the amount of $327.82, plus $0.56 per acre of forestland that they re-enroll in 480-a.

 

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