Instructions For Preparing Virginia Forest Products Tax Return

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Instructions For Preparing Virginia Forest Products Tax Return
The purpose of the forest products tax is to provide for the conservation of the natural resources of Virginia by the protection and
development of forest resources and reforestation of forest lands.
4. Computation of Tax: The tax is computed based on length or
1. What is a Forest Product? The term “forest product’’ includes
volume measurements of the forest product. Effective July 1,
all types of forest products including, but not limited to, logs
1998, the tax may be computed based upon the weight of the
timber, pulpwood, excelsior wood, chemical wood, woodchips,
forest products at the election of the taxpayer. The individual
bolts, billets, cross ties, switch ties, poles, piles, fuel wood, posts,
rates for each forest product are listed on the tax return.
all cooperage products, tanbark, mine ties, mine props, and all
other types of forest products used in mines.
5. Payment: Full payment of the amount due must accompany the
return. Checks and money orders should be made payable to the
2. Who is Liable for the Forest Products Tax? The forest products
Department of Taxation.
tax is generally payable by every person engaged in business in
Virginia as a manufacturer or shipper of forest products for sale,
6. Penalty and Interest: A penalty is imposed for late payments.
profit , or commercial use. In addition, the tax applies to the
The penalty is 5 % of the amount of tax due. If the payment is
severance of timber and other forest products from Virginia soil,
made six months or more after the due date, interest will be
including land owned by the Commonwealth of Virginia or by
assessed upon the entire amount due in accordance with the Code
the United States within the geographical confines of Virginia,
of Virginia § 58.1-15.
where the forest products severed enter commercial channels of
7. Distribution of Tax by Locality: At least 50 % of the tax
trade for competitive markets. The tax does not apply to forest
collected within any county or city must be expended for
products severed from soil outside Virginia.
reforestation and for the protection and development of forest
“Manufacturer” means the person or entity who (i) operates a
resources in such county or city. Accordingly, separate accounting
sawmill for the sawing of logs into rough lumber and its various
is necessary for each item of forest products listed on the quarterly
sizes and forms; (ii) operates a cooperage mill, veneer mill,
or annual return. In addition, it is also important for filers to
excelsior mill, paper mill, chipmill, chemical plant, or other
complete the “Distribution of Tax by Counties” schedule listed
operation for the processing of forest products into products other
on page 2 of Form 1034.
than lumber; (iii) purchases from the person who severs cross
8. Exemptions from the Tax: The tax does not apply to an
ties, switch ties, mine ties, mine props, and other forest products
individual owner of timber who occasionally severs or cuts the
used in connection with mining, piles, or poles (except fish net
same from his own premises to be utilized by him in the
poles); (iv) severs posts, fuel wood, fish net poles, and similar
construction or repair of his own structures, buildings, or
products. If the manufacturer is not in Virginia, the tax is payable
improvements; for his home consumption; or use by him in the
by the shipper.
processing of his own farm products. The tax also does not apply
“Shipper” means any person or entity in Virginia (whether owner,
to forest products severed from land owned by the
lessee, woodyard operator, agent, or contractor) who sells or
Commonwealth and used by state educational institutions for
ships any forest product in an unmanufactured condition outside
experimentation in a teaching of forestry, where the severance is
the Commonwealth by railroad , truck, barge, boat, or by any
necessary or incidental to such experimentation and teaching.
other means of transportation.
9. Small Manufacturers and Certain Small Severers: Certain
“Sever’ means to fell, cut or otherwise separate timber or any
manufacturers and severers may elect to use Form 1035 and pay
other such forest product from the soil.
an annual tax rate on or before January 30. In such instances, the
taxpayer must notify the Department of Taxation of the annual
The forest products tax is payable only once on each forest
election.
product. For purposes of computing the tax, “manufacturer” shall
mean the first manufacturer.
“Small Manufacturer” means any manufacturer of rough lumber
who during the calendar year manufactures 500,000 or less board
3. Return Due Dates: A forest products return (Form 1034) is due
feet. The annual flat tax rates for small manufacturers are
within 30 days after the close of each quarter, even if no forest
determined as follows:
products have been handled during the quarter.
Amount Manufactured
Annual Flat Tax
The quarter ending dates and return due dates are:
300,000 board feet or less
$ 230
Quarter Ending
Return Due On or Before
Between 300,000 board feet
March 31
April 30
and 500,000 board feet
$ 460
June 30
July 30
“Small Severer” means any person who severs for sale 100 or
September 30
October 30
less cords of fuel wood, or 500 or less posts or fish net poles
December 31
January 30
during any one calendar year. Small severs may elect to compute
See Section 9 for information concerning the optional filing
their tax annually in accordance with the tax rates listed on Form
requirements for small manufacturers and certain small severers.
1035.
Assistance
For assistance, call (804) 786-2450 or write to: Department of Taxation
P.O. Box 715
Richmond, VA 23218-0715
Forms and instructions are available for download from our web site, , or by calling (804) 440-2541.
Va. Dept, of Taxation
1034 Inst.
6201134 Rev. 8/05

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