May 2, 2025
Public hearing – April 24
This summary incorporates the proposed -1 amendment.
Oregon is experiencing more severe and frequent wildfires as a result of the climate crisis. In fact, the Oregon Legislature held a special session in late 2024 to authorize payments necessitated by record-breaking wildfires. Funding for wildfire programs remain uncertain.
Oregon’s timber severance tax was discontinued in 2003. As a consequence, over $3 billion of revenue was lost to rural timber-dependent counties. Further, the burden of paying the bill for fire protection now falls disproportionately on Oregon taxpayers, smaller companies, and small woodland owners. Indeed, much of Oregon’s timber land is owned by out-of-state Real Estate Investment Trusts, which pay no Oregon state tax.
Presently, only a Forests Products Harvest Tax provides significant revenue ($10-20 million per year over the past two decades.) It is worth noting that Oregon derives much less revenue from timber taxes than Washington or California, despite the higher value of much of Oregon’s timber.
The new severance tax would replace the Forests Products Harvest Tax. The new tax is based on stumpage value, which is the market price of standing timber before harvesting, transport and milling costs are factored in. All timber owners, both public and private, will pay a flat tax of 5% on the value of timber harvested. Oregon state residents who are timber owners can claim a state tax credit on their timber income for the full amount of severance taxes paid.
The revenues from the tax would be distributed as follows: one-third to the Department of Forestry to administer the Forest Practices Harvest Act, for fire suppression, and for forestry research and education; one-third to the state Fire Marshal for community resilience and mitigation efforts; and one-third to counties where the timber was harvested with no restrictions on their use.
Because this bill enacts a new tax, in order to pass the legislature it requires a three-fifths vote in favor.