Timber Tax & Excavation Programs
“Notice of Intents to Cut Wood or Timber” and “Notice to Excavate” forms may be obtained in person from the Hollis Assessing Office or by calling the Department of Revenue Administration at (603) 271-2687.
TIMBER TAX PROGRAM
Basic Rules & Requirements:
The State of New Hampshire has a real estate tax and by definition timber is considered to be real estate, therefore taxable. However, the method in which it is taxed is different from other real estate and is described in the State Constitution. Timber is only taxed at the time it is cut and at a rate which encourages the growing of timber. In order for the municipal assessing officials to be aware of cutting operations, they must be notified of the cutting by the owner filing a notice of intent to cut timber. The Notice of Intent, which is required by law, notifies the assessing officials, the NH Department of Revenue (DRA) and the NH Division of Forest & Lands. Timber on all land ownership is taxable at 10% of the stumpage value at the time of cutting.
The Notice of Intent to Cut must be completed with a volume estimate and signed by the assessing officials before any cutting required a notice can start (See below for exceptions). The original volume estimate cannot be exceeded without filing a supplemental notice of Intent to Cut for additional volumes. Notice of Intent to Cut and supplemental Notice of Intent to Cut are available from the Town of Hollis and the DRA, Timber Appraisal Division.
Town officials have 30 days to sign the Intent to Cut form, per RSA 79:3a III. They may withhold signature only for the following reasons:
If town officials have not acted on the Intent to Cut within 30 days of receipt the landowner should contact the DRA, which then enquires from the town as to the status of the paperwork. If municipal officials are withholding signatures, the landowner should be notified in writing by the town as to the reasons within 30 days of receipt of the Notice of Intent to Cut by the town.
Once the Intent to Cut Timber has been signed, a copy will be returned to the owner and logger, as specified on the Intent. A “Timber Worksheet” will also be sent, and should be returned with your Report of Timber Cut (see below).
Exceptions to filing an Intent to Cut Timber:
The responsibility for the timber tax depends on the type of ownership and must be one of the following:
Timber Tax Bond
All persons that own land within a town in which the cutting is to take place and are current on property taxes cannot be required to post a timber tax bond. All other owners must post a timber tax bond before the Notice of Intent to Cut is signed. Timber tax bonds are usually equal to the expected timber tax.
Report of Wood Cut
Report of Wood Cut forms are sent to owners filing a notice, along with a certificate that should be posted at the job site. Reports of wood cut must be filed with the town within 60 days of completion or by May 15th, whichever comes first. The Town may allow an extension upon receiving a written request. This request should be sent to the assessing officials prior to April 1st.
The report form serves as the basis for determining the timber yield tax; however, filing the worksheet, in addition to the report, ensures that the Assessing Office will be able to more accurately determine the true value of the wood product(s) for tax purposes.
If a taxpayer believes they have been overtaxed they must appeal to the Town within 90 days of the tax bill. If the Town denies the appeal then the taxpayer may appeal to the Board of Tax and Land Appeal (BTLA) within 180 days of the tax bill for appeal board hearing.
Penalties, Doomage and Enforcement
Fines for non-compliance range up to $2000. A Doomage penalty may be assessed for improper reporting. (Doomage is two times what the tax would have been if the Report had been seasonably filed and truly reported.) The DRA Timber Appraisal Division and the Division of Forest & Lands have the authority to issue a cease and desist for any cutting operation not in compliance with RSA 79.
"The Guideline to Assessing Timber" is available from DRA to assist owners and towns in proper assessment of timber per NH timber tax law. Please contact the DRA at (603) 271-2687 for a copy.
Further information regarding Timber Appraisal rules and regulations can be found at the DRA’s website, under “Timber” at http://www.nh.gov/revenue/munc_prop/propertyappraisal.htm
Basic Rules & Regulations
The State of New Hampshire has a real estate tax and earth (sand, gravel, loam, stone, etc) is considered to be part of the real estate, therefore taxable. Due to the difficulty of determining the market value of the earth products, and to deter the premature removal of earth products to avoid taxation, the legislature exempted earth from the real estate tax in 1998 and created the Excavation Tax under RSA 72-B. Earth, as defined in RSA 155-E:1, I, is only taxed at the time it is excavated at a rate of $.02 (two cents) per cubic yard. The Excavation Tax is paid to the municipality in which the excavation took place.
In order for the municipal assessing officials to be aware of the excavation operation they must be notified of the excavation by the owner by filing a “Notice of Intent to Excavate.” The notice of intent to excavate is required by law and notifies both the assessing officials and the NH Department of Revenue (DRA). Every owner who intends to excavate earth must file a notice of intent to excavate and the $100.00 administration and enforcement fee. The only exceptions are as follows:
Before any excavation can take place, a separate notice of intent to excavate must be fully completed by the owner for each parcel of land on which excavation will take place, each intent must be accompanied with an administration and enforcement fee (if applicable) and, the intent to excavate must be signed by the assessing officials. The original volume estimate cannot be exceeded without filing a supplemental notice of intent to excavate for the additional volumes (RSA 72-B:8-a). The notice of intent to excavate form is available at the municipality or from DRA.
The assessing officials have 30 days in which to sign the notice intent to excavate form. The assessing officials may decline to sign the intent for the following reasons (RSA 72-B:8 & Excavation Tax Administrative Rule 504.01):
If the assessing officials have not signed the intent to excavate, or notified the owners of their denial to sign within 30 days of receipt of the intent, the owners should contact the DRA. The DRA will inquire with the municipality as to the status of the paperwork.
Who Must File and When: (RSA 72-B:8)
The responsibility for the excavation tax depends upon the type of ownership and must be one of the following:
The intent to excavate must be filed at the beginning of the tax year (April 1st) and prior to excavating.
Excavation Tax Bond: (RSA 72-B:5)
Owners that own land within the municipality where the excavation is to take place and are current on property taxes and timber taxes cannot be required to post an Excavation Tax bond. All other owners must post an Excavation Tax bond before the notice of intent to excavate is signed. Excavation Tax bonds are usually equal to the expected Excavation Tax.
Report of Excavated Material: (RSA 72-B:9)
The DRA sends a report of excavated material form to each owner that has filed a notice of intent to excavate. In addition, a certificate to excavate is sent along with the report and must be posted in a conspicuous place within the area of excavating.
The report of excavated material must be filed with the municipality and the DRA within 30 days following the completion of the excavation. If the excavation is still in progress at the end of the tax year (March 31st), the report must be filed no later than the following May 15th. The report of excavated material serves as the basis for determining the amount of Excavation Tax to be assessed.
Appeal Process: (RSA 72-B:13)
An owner may, within 90 days of the notice of the Excavation Tax, appeal to the assessing officials in writing for an abatement from the original assessment. If the assessing officials neglect or refuse to abate, the owner may appeal to the NH Board of Tax and land appeals or superior court. Please refer to the law.
The DRA administers and enforces RSA 72-B, and has the authority and right to stop any excavation in violation of RSA 72-B, pursuant to RSA 72-B:17.
Penalties for Non-compliance
This is only a synopsis of the laws relating to Timber Tax and Excavation Tax. For further clarification please call the Town of Hollis Assessing Office at (603) 465-9860, refer to the New Hampshire statutes or call (603) 271-2687 Department of Revenue Administration, Timber Tax Appraisal.
Further information regarding rules and regulations can be found at the DRA’s website, under “Gravel” at: http://www.nh.gov/revenue/munc_prop/propertyappraisal.htm
Last updated September 30, 2010. cmc
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