Exemption for Timber Harvesting

A partial exemption from sales and use tax became available under 6356.6 for sales and purchases of equipment, machinery and their parts designed primarily for off-road use in commercial timber harvesting operations by a "qualified person." The partial exemption also applies to leases of off-road commercial timber harvesting equipment and machinery subject to tax measured by rentals payable.

  • The partial exemption applies only to the sales and use tax rate portion. The exemption does not apply to any local, city, county, or district taxes. Sales and purchases of off-road commercial timber harvesting equipment and machinery will continue to be subject to the remaining portion of the sales and use tax rate consisting of the local, city, and any applicable district taxes.
  • The qualified property must be designed for use primarily off-road in commercial timber harvesting operations and be used primarily in timber harvesting. "Primarily" means 50% or more off-road use.
  • A "qualified person" means any person who is engaged in commercial timber harvesting operations.
  • Commercial timber harvesting operations involve the cutting or removal, or both, of timber from timberlands for commercial purposes.
  • Timber is considered to be trees of any species, excluding nursery stock, harvested for forest products, or other forest purposes. Qualified timber includes firewood, Christmas trees, poles and pilings, biomass, etc.
  • Typical equipment and their general use, that may be eligible for this partial exemption are:
    • Cable Yarders - used to harvest trees on very steep slopes by suspending the logs on a cable
    • Chainsaws - used to cut down trees
    • Chippers - used to chip small logs and brush into very small pieces
    • Feller-bunchers - used to cut very small trees
    • Front end loaders - used to load logs onto trucks
    • Tractors (with tracks) or rubber tired skidders - used to move logs from the woods to the roadside
  • A retailer will be relieved from the liability for the sales and use tax subject to the partial exemption if they take a partial exemption certificate timely and in good faith from purchasers stating that the property will be used in a qualifying manner as provided under section 6356.6. The partial exemption certificate should be retained for a period of not less than four (4) years.
  • A purchaser who provides a partial exemption certificate to a retailer for equipment and machinery that does not qualify for the partial exemption or who does not use the equipment or machinery in a qualifying manner, will be liable for the tax, plus interest and applicable penalties. Purchasers must maintain records supporting the use of any equipment, machinery and parts purchased under a partial exemption certificate.

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