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Important Information Concerning the Primary Forest Products Tax

CD-354 Web, 6-07

What are “Primary Forest Products?” “Primary forest products” include those products of the tree after it is severed from the stump and

cut to its first roundwood product for further conversion. These products include whole trees for chipping, whole tree logs, sawlogs, pulpwood, veneer

bolts, posts, poles, and pilings.

Who pays the Primary Forest Products Tax? All “processors” of primary forest products harvested within the boundaries of North Carolina are

required to pay the Primary Forest Products Tax. A processor is an individual, a corporation, a partnership, or another entity that procures primary

forest products at their initial point of concentration for conversion to secondary products or for shipment to others for the conversion. The tax applies

to the entity that owns the primary forest product at the time it is processed into a secondary product such as rough lumber, crossties, timbers, chips,

veneer, furniture squares, posts, poles, pilings, or any other products made directly from primary products.

Exemptions. The following are not considered “primary forest products” and are exempt from taxation:

Christmas trees and associated greens

Material harvested from an individual’s own land and used on that land for the construction of fences

Buildings or other personal use developments

Fuel wood harvested for personal use in individual homes.

Categories. This form lists the four general categories of primary forest products:

Softwood sawtimber, veneer logs and bolts, pine poles and piles, and all other softwood products normally measured in board feet

Hardwood and bald cypress sawtimber, veneer, and all other hardwood and bald cyprus products normally measured in board feet

Softwood pulpwood, posts, and other softwood products normally measured in cords

Hardwood pulpwood, posts, and other hardwood and bald cypress products normally measured in cords

The processor must ascertain, from its records, the quantity of the product for each category. The primary forest products purchased for processing

are taxable in the quarter in which they are delivered to the mill.

Assessments on primary forest products are made either according to the international 1/4 inch log rule, the standard 128 cubic foot cord, or their

equivalent. The correct measurement for each category is listed under the “quantity column” for each of the four general categories of primary forest

products.

Conversion Rates. Because of the many variables concerning primary forest products, such as tree species, place of origin of tree, difference in

size of wood pieces, and differences in individual measuring systems, a system of averages must be used in converting one measuring system to

another. These averages will apply generally rather than to any specific timber tract or to any particular mill at a given time. The following conversion

chart applies. These conversions are considered to be equivalent to the international 1/4 inch log rule or the standard 128 cubic foot cord.

Conversion Chart

Softwoods (except Bald Cyprus)

B. Weight Scaling

14,000 lbs. = one thousand board feet international

Softwood products customarily measured in board feet

C. Other log products that are not scaled or weighed

A. Measurement by Log Scaling

For sawmills the lumber tally of production from logs is considered

International 1/4 inch Log Rule = 1 x 1

equal to International.

Doyle Log Rule = Doyle Scale x 1.45 = International

Scribner Log Rule = Scribner Scale x 1.45 International

II.

Hardwood and bald cypress products customarily measured in cords

2/3 Rule (for 8 ft. cedar) = 2/3 Scale x .90 = International

A. Measurement of solid wood content

B. Weight Scaling

80 cubic feet of solid wood is equivalent to one 128 cubic foot

12,000 lbs. = One thousand board feet international

standard cord

C. Other - Log products that are not scaled or weighed

B. Measurement by weight

For sawmills the lumber tally of production from logs is considered equal

5,800 pounds equals one 128 cubic foot standard cord

to International

C. Hardwood products customarily classed by other measures such as

II.

Softwood products customarily measured in cords

fence posts

For split or round hardwood fence posts, 100 posts equal one

A. Measurement by rough-stack of wood and bark

stacked 128 foot cord

This measurement is converted to the Standard 128 foot cord

B. Measure of solid wood content

Special Chip Products (hardwood and softwood)

80 cubic feet of solid wood is equivalent to one 128 cubic foot stacked

(including air, bark and wood) cord

Whole tree stems delivered to mills for conversion to lumber and veneer

with the ends being used for cord equivalent products

C. Measurement by weight

5,300 pounds equals one standard cord

A. Pine ends of whole stems chipped either at buying yard or sawmill

Use the best estimate of mill management as to the proportion that

III. Softwood products customarily classed by other measure (such as

the pine ends being used for cord equivalent products comprise of

poles, piles, and posts)

the total weight.

This proportion of total weight is to be converted by the

A. Pine poles and piles designated for pressure treating with preservative,

5,300 pound cord-factor

220 cubic feet is equal to one thousand board feet international

B. Hardwood ends of whole stems chipped either at buying yard or sawmill

B. Softwood posts to be treated with preservative, not including veneer cords;

Same procedure as in A, above, except that the total weight is to be

75 cubic feet of solid wood is equal to one rough-stacked 128 cubic foot

computed by the 5,800 pound cord-factor

standard cord

II.

Total free chipping in the woods

C. Softwood posts that are not to be treated with preservative, 100 posts is

equal to one rough-stacked 128 cubic foot cord

This type of operation utilizes the same material mentioned above, plus the

logging residues, both standing and down, of the wholestem operation. In order

Hardwoods and Bald Cyprus

not to penalize these operators for using residues (residues are not assessed

for any other products), the cord equivalent is:

Hardwood and bald cyprus products customarily measured in board feet

A. Measurement by Log Scaling

A. Pine total-tree chips (including bark, twigs, and leaves)

6,500 pounds equal one standard cord

International 1/3 inch Log Rule = 1 x 1

Doyle Log Rule = Doyle Scale x 1.25 = International

B. Hardwood total-tree chips (including bark, twigs, and leaves), 10,000

Scribner Log Rule = Scribner Scale x 1.09 = International

pounds equal one standard cord

Form Cd-354 - Tax Return For Primary Forest Products - North Carolina Department Of Revenue Page 2

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