Timber, timberlands, and dividends and distributions from real estate investment trusts

From the 2024 DOR Tax Exemption Study

82.87.050(7) - Timber, timberlands, and dividends and distributions from real estate investment trusts Description The capital gains tax does not apply to the sale or exchange of timber or timberland. This exemption also applies to dividends and distributions from real estate investment trusts derived from the sale or exchange of timber or timberland. Purpose To provide a tax preference for owners of timber and timberland. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $9.600 $10.200 $10.500 $10.200 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this exemption would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $0.000 $10.000 $9.700 Local Taxes $0.000 $0.000 $0.000 $0.000 Assumptions - This repeal takes effect January 1, 2025, and impacts 12 months of collections in fiscal year 2026. - Growth rate mirrors the long-term capital gains growth rate reflected in the Economic and Revenue Forecast Council's March 2023 forecast. - Individuals with estimated payments: - Will receive refunds in fall 2023, amounting to 12% of the estimated payments. - Will us