Mindel Scott

What Is Managed Forest Law

Note: Contact your local Ministry of Natural Resources office for more information on developing a forest management plan. The Woodland Tax Law (WTL) was a landowner incentive program that promoted sustainable forestry on private forests by reducing or deferring property taxes. It was promulgated in 1954 and allowed registration until January 1986. The land was inscribed for a period of 15 years. The last WTL registrations expired on December 31, 2000. When the entries expired, no documents were issued. The beauty of the lands listed in the MFL is that you are eligible to file an F list on your personal tax return. Current income tax laws allow for the full deduction of normal business expenses that would not otherwise be deductible from ordinary income. This means that kilometres, tractors, ATVs, chainsaws and other items needed to implement the forest management plan can be deducted from regular income via Schedule F of the personal income tax return. Of course, you must report forest product revenues when they are cut and removed from the land according to your management plan. However, admission to the MFL and signing a management plan are automatically prima facie evidence of his desire to operate a for-profit “forest farm”.

A withdrawal fee plus a $300 withdrawal fee will be charged. The type of order determines the calculation of the withdrawal fee. Contact the forest tax law specialist for information on the types of orders. Forest land owners who follow an eligible forest management plan may pay reduced property taxes as long as the property continues to meet the requirements of the Managed Forest Class 2c classification. This classification is administered by the counties. Forest certification is independent proof that forest management meets sustainability standards and best practices. In the context of forest certification, sustainability encompasses the ecological, economic and social components of forests and surrounding communities. Membership in the MFL certified group is free and completely voluntary for landowners registered under the Managed Forest Act. New MFL applicants and landowners who join the program must decide if they join the MFL certified group [PDF]. Once they are members of the group, individual participants can leave the certified group without cancelling the MFL. For more information, see the MFL Group`s Forest Certification page.

The Managed Forest Act (MFL) program is an incentive program for landowners that promotes sustainable forestry on private forests. In exchange for good forest management, the landowner pays reduced property taxes. It was enacted in 1985 and replaced the Forest Tax Act and the Forest Cultivation Act. While these requirements seem onerous, almost every county has a state forester who is more than happy to create a management plan. To qualify for the MFL designation, you must have at least 20 hectares contiguous, 80 percent of which must be covered or designated for forest products that can produce wood commercially (this is a very simplified definition). A forester should check the land to determine whether or not its current condition allows for the MFL designation. (One may also be eligible to plant certain species to qualify for the 80 per cent definition.) The Wisconsin Managed Forest Law Program (“MFL”) is a little-known area of land ownership that allows a homeowner to enjoy the benefits of very low property taxation through an application process. Often, registration reduces the property tax bill of a package of 40 acres of thousands of dollars to less than $100.

There are also certain tax benefits that are allowed as a result of operating under the program. To be eligible for the MFL, one must agree to a contract with the State of Wisconsin under which he/she will adopt and maintain sustainable forest practices and goals. Participation in the MFL (Managed Forest Law) program is open to all private forest land owners. To be eligible for the MFL program, a landowner must own at least 20 hectares of contiguous land and at least 80% of this land must be productive forest land. In summary, taking over existing woodlands or former farmland in MFL management plan parcels is a good way to significantly reduce the property tax burden on a forest parcel. It will also allow for its continued recreational use with the proper establishment and enforcement of ownership of managed forest parcels. It is always best to start the adventure in the managed forest planning program with an experienced lawyer who knows the process and procedures of registering managed forest lands and setting up the right ownership company. In addition, the accountant must be familiar with Schedule F (which takes place in all transactions) and the MFL program.

Finally, coordination with the forester of the county where his property is located is crucial to ensure that the administrators who review and manage the parcels go hand in hand with the owner. Once registered, you lose the ability to determine how and when trees are cut down on your property. Once you have been subjected to an MFL management plan, the forester decides when and how to cut the wood. You must notify the MNR forester at least 30 days before cutting a notice of cutting and also submit a separate notice to the clerk of the district where the cutting will take place.