Oregon Timber Tax: Rates, Filing, and Reforestation Rules

If you harvest timber in Oregon, you owe the state’s Forest Products Harvest Tax at a combined rate of $6.7689 per thousand board feet (MBF) for timber cut during 2026, filed on Form OR-201-FP by April 15 of the following year.¹ Landowners enrolled in the Small Tract Forestland program pay a separate severance tax instead. Both are privilege taxes on the act of harvesting, so the person doing the cutting carries the bill.

Who Owes the Tax and What’s Exempt

The Forest Products Harvest Tax applies to timber cut from virtually any land in Oregon, whether privately owned, county-owned, or state-owned. Most tribal lands are the main exception, not federal lands as some landowners assume.¹

The first 25,000 board feet (25 MBF) harvested by any taxpayer in a calendar year is excluded from the tax.² That covers most personal-use removals and firewood cutting. Once you cross 25 MBF, the tax applies only to the volume above that line. Harvest 40 MBF and you pay on 15.

2026 Rate and What It Funds

The combined rate of $6.7689 per MBF for calendar year 2026 is built from statutory components, each directed to a specific purpose:

$0.90 per MBF for forest research at Oregon State University’s Forest Research Lab.
$1.00 per MBF for fire protection through the Oregon Forest Land Protection Fund.
$2.6544 per MBF toward Forest Practices Act enforcement, covering up to 40 percent of the state’s administrative cost.
$0.21 per MBF for professional forestry education at state universities.

The balance supports the Oregon Forest Resources Institute and the Conservation and Recreation Fund.² The legislature resets these rates every two years, so confirm the current figure on the Department of Revenue’s timber page before estimating a future harvest.

Small Tract Forestland Severance Tax

If your land is enrolled in Oregon’s Small Tract Forestland (STF) program, you pay a severance tax at harvest instead of the standard Forest Products Harvest Tax. In exchange, your annual property tax assessment on the forestland is lower.³ The program is governed by ORS 321.700 through 321.754 and requires ownership of at least 10 acres but fewer than 5,000 acres of Oregon forestland.⁴

For 2026, the severance rate is $7.31 per MBF in Western Oregon and $5.66 per MBF in Eastern Oregon.¹ The severance tax return and payment are due by April 15 of the year following harvest.⁵

Leaving the program carries a cost. If your land is removed for failing to meet program standards, the county assessor calculates an additional tax equal to the difference between what you paid over the previous five years and what you would have owed at full market-value assessments during that same period.³

How to File and Pay

The correct form is Form OR-201-FP, not the older “OR-1220” number still floating around some guides.⁶ You can file electronically through Revenue Online or submit a paper return by mail.

The annual return and payment are due April 15 for timber harvested the previous calendar year. If you expect your harvest tax liability to exceed $1,500 for the year, you must also file quarterly estimated tax reports by the last day of the month following each calendar quarter.⁷ Commercial operators generally hit that threshold quickly, so quarterly filing is the norm for any real logging operation.

What You Need Before Filing

Completing the return takes a few pieces of information gathered during the harvest:

Total harvest volume in MBF. Divide total board feet by 1,000 and round to the nearest whole number.⁶
Species breakdown, reported separately by species.
Your Notification of Operation number, the state-issued identifier tied to your harvest.
Landowner and timber owner details. If they differ, both go on the form.

In the Pacific Northwest, saw logs are typically measured using the Scribner log rule, which estimates board-foot volume from each log’s small-end diameter and length. If you sell by weight, a sample-scaling process converts weight to board feet. Accurate volume numbers before you file prevent the most common audit triggers.

Penalties for Late Filing or Nonpayment

Oregon’s penalties escalate the longer you wait. Miss the April 15 deadline and the state adds a 5 percent delinquency penalty on the tax owed. If you still haven’t filed three months after the due date, a 20 percent failure-to-file penalty stacks on top, bringing the total to 25 percent of the tax due.⁸

Any delinquent balance also accrues interest at the rate set under ORS 305.220, which adjusts periodically. Fraud or intentional evasion triggers a 100 percent penalty on the full deficiency plus interest from the original due date.⁸ File on time even if you dispute the amount. A late return costs far more than an amended one.

Notification Required Before Harvest

Before a single tree comes down, Oregon law requires a notification of operation filed with the State Forester through the Oregon Department of Forestry. This applies to any operator, timber owner, or landowner planning to harvest on public or private land.⁹ The notification includes a legal description of the operating area, names and addresses of the operator, timber owner, and landowner, and any other information the State Forester requires.

All three parties share the obligation. If you hire an independent logging contractor and nobody files, everyone involved can face consequences. Oregon courts have upheld penalties against timber owners even when a contractor physically started cutting without notice.⁹ The notification number you receive is also required on your harvest tax return, so skipping this step causes problems on both sides.

Reforestation After Harvest

Harvesting in Oregon triggers a legal duty to replant. Under ORS 527.745, site preparation and replanting must begin within 12 months after harvest ends, and all planting must be finished by the end of the second planting season after harvest.¹⁰ By the end of the fifth growing season, at least 200 healthy seedlings per acre must be established and free to grow.

That 200-per-acre figure is the legal floor. Most landowners plant well over 300 per acre because not every seedling survives, and falling below the minimum invites enforcement. If a partial harvest or thinning leaves enough standing trees to meet minimum stocking standards, the reforestation requirement does not apply. The obligation kicks in only when tree density drops below the threshold for your forestland classification.

Federal Income Tax on Timber Sales

Oregon’s harvest and severance taxes are only part of the picture. Timber sale income also appears on your federal return, and how it’s taxed depends heavily on how the sale is structured.

Capital Gains Versus Ordinary Income

Selling standing timber generally qualifies for long-term capital gains treatment under Internal Revenue Code Section 631, which carries a lower federal rate than ordinary income. Two paths get you there. Under Section 631(a), if you own timber (or hold a contract right to cut) for more than one year and then cut it for sale or use in your business, you can elect to treat the cutting itself as a sale, with gain measured against the timber’s fair market value on January 1 of the year you cut. Under Section 631(b), a lump-sum or sealed-bid sale of standing timber, with title transferring while trees are still rooted, receives capital gains treatment automatically.

The distinction that trips people up: once you cut trees into logs, they become personal property. Selling logs you’ve already cut generally produces ordinary income subject to self-employment tax unless you held a qualifying contract right to cut. Structuring the sale before the chainsaw starts is the single most important tax-planning step for a timber harvest.

Holding Period

Purchased timber must be owned for more than one year to qualify for long-term capital gains rates. Inherited timber qualifies as long-term automatically regardless of how long the decedent held it. Gifted timber uses the donor’s holding period plus the recipient’s, so if the donor owned the timber for over a year, the recipient qualifies for long-term treatment immediately.

IRS Form T

Attach IRS Form T to your federal return if you claim a depletion deduction, elect Section 631(a) treatment, or make an outright sale under Section 631(b). An exception applies for occasional sales, defined as one or two transactions every three to four years, but you still need records of every timber-related activity even if you skip the form. Any single acquisition of $10,000 or more must be reported separately on Form T.¹¹

1
Oregon Department of Revenue. Timber Harvest Taxes
2
Oregon State Legislature. Oregon Code 321.015 – Levy of Privilege Taxes Upon Harvest of Timber for Certain Purposes; Exclusion
3
Oregon Department of Revenue. Forestland Program
4
Oregon State Legislature. Oregon Code 321.709 – Small Tract Forestland Qualification Requirements
5
Oregon State Legislature. Oregon Code 321.741 – Due Dates for Severance Tax Return and Payment
6
Oregon Department of Revenue. Form OR-201-FP Instructions – Forest Products Harvest Tax
7
Oregon State Legislature. Oregon Code 321.045 – Payment of Tax; Returns; Estimated Tax
8
Oregon State Legislature. Oregon Code 321.560 – Audit of Returns; Interest and Penalties Upon Failure
9
Oregon State Legislature. Oregon Code 527.670 – Commencement of Operations; Rules; Written Plan
10
Oregon State Legislature. Oregon Revised Statutes Forestry and Forest Products 527.745
11
Internal Revenue Service. Instructions for Form T (Timber)