Document Number
84-164
Tax Type
Forest Products Tax
Description
VIRGINIA FOREST PRODUCTS TAX REGULATIONS
Topic
Reports
Date Issued
09-19-1984

VIRGINIA FOREST PRODUCTS TAX REGULATIONS


VIRGINIA DEPARTMENT OF TAXATION
January 1, 1985

INTRODUCTION

These regulations for the Virginia Forest Products Tax are published by the authority granted the State Tax Commissioner under Virginia Code § 58-48.6 (§58.1-203 effective January 1, 1985) and are subject to amendment, revision and supplemental regulations as required or appropriate.

Amendments, revisions and updates to these regulations will be issued as replacement pages, each replacement page having on it the date of revisions.

Each regulation § is numbered to reference the section of Title 58.1 of the Code of Virginia which it interprets. The first three digits, 630, identify these regulations, for purposes of the Virginia Register of Regulations, as regulations of the Department of Taxation. The digits following the first hyphen indicate the tax type, and the digits following the second hyphen indicate the § of Title 58.1 being interpreted. For example, the section number 630-19-1600 identifies the agency (630), the forest products tax (19), and the section of Title 58.1, Code of Virginia, which is interpreted (1600).


W. H. Forst
State Tax Commissioner
Virginia Department of Taxation
P.O. Box 6-L
Richmond, Virginia 23282



VIRGINIA FOREST PRODUCTS TAX REGULATIONS

EFFECTIVE DATE: January 1, 1985, with retroactive effect according to § 58-48.6 (recodified as § 58.1-203).

EXPIRATION DATE: N/A

SUPERSEDES: All previous documents and any oral directives in conflict herewith.

REFERENCES: Code of Virginia §§ 58.1-1600 through 58.1-1622 are
        • regulated herein.
AUTHORITY: § 58-48.6, Code of Virginia, and § 58.1-203 on
and after January 1, 1985.

SCOPE: Applicable to all taxpayers subject to forest products tax.

SUMMARY: These are initial regulations interpreting certain
provisions of the Virginia forest products tax, consisting
of §§ 630-19-1600 through 630-19-1622.

ADOPTION DATE: September 19, 1984





TABLE OF CONTENTS

REGULATION
Section PAGE

630-19-1600 SHORT TITLE
            • Generally

630-19-1601 DEFINITION
            • F.o.b. loading out point
              Forest product
              Manufacturer
              Shipper
              Severer

630-19-1602 LEVY OF TAX FOR FOREST CONSERVATION
Generally

630-16-1603 LIEN
            • Generally

630-19-1604 TAX RATES
            • Generally
              Tax rates

630-19-1605 ALTERNATIVE FOR RATES
    • Generally
Alternative rates

630-19-1606 OPTIONAL RATES FOR CERTAIN MANUFACTURERS
and AND SEVERERS
630-19-1607 Generally
Limitation on tax for certain manufacturers

630-19-1608 EXEMPTIONS
    • Generally
630-19-1609 PAYMENT, COLLECTION AND DISPOSITION OF TAX
Generally
            • Disposition of tax

630-19-1610 ALTERNATIVE PAYMENT, COLLECTION AND DISPOSITION OF TAX
                • Generally
                  Disposition of alternative tax

630-19-1611 ALLOCATION OF TAX TO LOCALITIES
            • Generally

630-19-1612 RETURNS TO BE FILED BY MANUFACTURER OR
and SHIPPER; TIME OF PAYMENT OF TAX
630-19-1613 Generally
Return due date
Return information
Payment of tax

630-19-1614 REPORTS TO BE MADE BY TRANSPORTERS OF FOREST PRODUCTS
Generally
Exception
Failure to file transporter's report

630-19-1615 WHEN DEPARTMENT MAY MAKE RETURN FOR DELINQUENT TAXPAYER; PENALTY
                • Generally
                  Penalty
                  Interest


630-19-1616 ABSCONDING TAXPAYER

630-19-1617 RECORDS TO BE KEPT
Generally
Examination by commissioner

630-19-1618 PENALTY FOR FAILURE TO MAKE RETURN, KEEP RECORDS, OR PERMIT EXAMINATION OF RECORDS
Generally

630-19-1619 PENALTY AND INTEREST FOR FAILURE TO PAY THE TAX WHEN DUE
    • Generally
630-19-1620 AUDIT OF RETURNS; TAX UNDERPAID; AMENDED
1621, 1622 RETURNS; AND TAXPAYER APPEALS
                • Generally
                Tax overpaid
              Tax underpaid
              Amended return
              Penalties
              Interest
              Taxpayer appeals


630-19-1600. SHORT TITLE. Generally. The tax shall be known as the forest products tax which is levied, in addition to all other taxes, as a special fund tax for the purpose of protection and reforestation of Virginia forest lands.

630-19-1601. DEFINITIONS. The following words, terms and phrases are defined herein for purposes of the tax imposed by Title 58.1, Chapter 16 only:

(1) F.o.b. loading out point - F.o.b. loading out point means the point at which product is loaded on a railroad car or barge, boat or other public transportation for shipment or the point of delivery by taxpayer's vehicles. The invoice value f.o.b. loading out point includes cost of manufacture and cost of delivery by taxpayer, but does not include costs of shipping by public transportation.

(2) Forest product - The term "forest product" includes logs; timber; pulpwood; excelsior wood; chemical wood, except dead chestnut wood; woodchips; bolts; billets; crossties; switch ties; poles; piles; fuel wood; posts; all cooperage products; mine ties; mine props; and any and all other types of forest products.

(3) Manufacturer - Manufacturer means any person in Virginia 1) who operates a sawmill for the conversion of logs into lumber in its various sizes and forms; or 2) who manufactures or processes forest products into products other than lumber, including operation of cooperage mills; veneer mills; excelsior mills; paper mills; chipmills; chemical plants or any other facilities for manufacturing or processing forest products into products other than lumber; or 3) who purchases from the person who severs a) crossties; b) switch ties; c) mine ties, mine props, and other forest products used in connection with mining; d) piles; e) poles, except fish net poles; or 4) who severs posts, fuel wood, fish net poles, and similar products.

(4) Shipper - Shipper means any person in Virginia who sells, ships or otherwise disposes of outside the Commonwealth by whatever means of transportation any forest product in an unmanufactured condition which was severed from the forests of Virginia. The term "shipper" includes, but is not limited to, an owner, lessee, wood yard operator, concessionaire, agent or contractor who sells, ships or disposes of outside the Commonwealth any unmanufactured forest products severed from Virginia forests.

(5) Severer - Severer means any person who fells, cuts or otherwise separates timber or any other forest product from the soil.

630-19-1602. LEVY OF TAX FOR FOREST CONSERVATION. Generally. The forest products tax is levied upon and collectible from every manufacturer or shipper as defined in Regulation 630-19-1601, for the purpose of furthering the conservation of the natural resources of Virginia by protecting and developing the forest resources and by the reforestation of the forest lands. The tax is applicable to any forest products severed from land located in Virginia whether owned privately, by the Commonwealth, or the United States.
    • a) The forest products tax is not applicable to any forest products severed from land located outside of Virginia nor to forest products manufactured in Virginia from timber severed from land located outside of Virginia.

630-19-1603. LIEN. Generally. Until the forest products tax and any applicable interest and penalties are paid, such tax, penalties and interest shall be a lien upon: a) the severed forest products, b) the forest products assembled for shipment or c) any products manufactured therefrom and shall remain a lien upon all such products until the applicable tax, together with interest and penalties, if any, has been paid or until such forest products or products manufactured therefrom has been sold by the manufacturer, shipper, or severer.

630-19-1604. TAX RATES. A. Generally. The rates herein set forth are effective July 1, 1984 and shall continue, unless subsequently amended, until July 1, 1990.

B. Tax Rates. The statutory classifications of forest products and the tax rates imposed thereon are set forth below:
    Kind of Products Tax Rates

    1)Lumber in various sizes and forms, (a) Pine $1.15 per 1000 feet
    including railroad switch ties, board measure
    bridge timber and dimension (b) Hardwood, cypress, and
    stock: other species 22½ per
                                • 1000 feet board measure
    2)Logs:
    Note: Applicable only to timber (a) Pine $1.15 per 1000 feet
    sold as logs and not converted log scale, Inter-national
    into lumber or other products ¼” Kerf
    in this state. Rule
                              • (b) Other Species .... 22½ per
                              • 1000 feet log scale, Inter-national
                                ¼” Kerf Rule

    3)Veneer Logs: (a) Pine $1.15 per 1000 board
    feet log scale, International
                              • ¼” Kerf Rule
                                (b) Other Species 22½ per 1000 board feet log scale, Inter-national
                                ¼” Kerf Rule


    4)Pulpwood, excelsior wood, (a) Pine 47½ per standard
    chemical wood, bolts and cord of 128 cubic feet
    billets, fuel wood, and (b) Other Species 11¼
    and other products per standard cord of
    customarily sold by the 128 cubic feet
    cord:

    5) Chips manufactured from (a)Pine 0.986 per 100 lbs
    round wood and customarily (b) Other Species 0.234, per
    sold by the pound. 100 lbs

    6)Railroad crossties: (a) Pine 3.8, per piece
                              • (b) Other Species 1, per
            piece
    7)Posts, and mine ties, mine (a) Pine 4' length or less,
    props, round mine collars 38 per 100 pieces
    and other types of timber (b) Other Species 4' length
    used in connection with or less, 9 per
    mining and ordinarily sold 100 pieces
    by the piece (c) Pine over 4' but not
      • over 8', 61¾
        per 100 pieces
                              • (d) Other Species ....over 4'
                                but not over 8',
                                14¼ per 100 pieces
                                (e) Pine over 8', 76 per 100 pieces
                                (f) Other Species over 8’, 18 per
                                100 pieces

    Taxpayer may elect to pay taxes
    on products in this item as
    follows: (g) pine $1.045 per 1000
      • lineal ft.
                              • (h) Other Species 24¾
                                per 1000 lineal ft.

    8) Piling and poles of all types: 2.31% invoice value
    f.o.b. loading point

    9) Keg staves: (a) Pine 3.8 per standard
    400 inch bundle
                              • (b) Other Species 1½ per
      • standard 400 inch bundle
      • Keg heads: (c) Pine 11½ per 100 heads
                              • (d) Other Species 4½ per
        100 heads
        Tight cooperage: (e) 4½ per 100 staves
        Tight cooperage: (f) 9 per 100 heads

    10)Any other type of forest products The State Tax Commissioner
    not above enumerated: shall determine a fair unit tax
    rate, based on the cubic foot
    wood volume relationship
    between the product and the
    cubic foot volume of 1000 feet
    board measure of pine when the
    product is pine or on the unit
    rate of hardwood lumber when
    the product is a species other
    than pine.

    11) Annual tax for small manufacturers (a) 300,000 to 500,000 board
      • of rough lumber: feet $460.
                              • (b) less than 300,000 board
                                feet $230.

    630-19-1605. ALTERNATIVE FOR RATES. A. Generally. The contingent alternative rates are set out for information purposes only. In the event the General Assembly fails to appropriate from the State's general fund an amount which at least equals the revenue estimated to be collected from the pine reforestation program, the alternative rates shall be imposed in lieu of the tax rates in Regulation 630-19-1604.

    B. Alternative rates. (FOR INFORMATION PURPOSES ONLY)

    Kind of Products Tax Rates

    1) Lumber in various sizes and forms, (a) Pine 15 per 1000 feet
    including railroad switch ties, board measure
    bridge timber and dimension (b) Hardwood, cypress, and
    stock: other species 22½ per
    1000 feet board measure

    2) Logs: (a) Pine 15 per 1000 feet log
    Note: Applicable only to timber scale, International ¼” Kerf Rule
    sold as logs and not converted (b) Other Species 22½ per 1000
    into lumber or other products feet log scale, International
    in this state. ¼” Kerf Rule
    P. D. 84-164

    3) Veneer Logs: (a) Pine 15 per 1000 board feet
    log scale, International ¼”
    Kerf Rule
    (b) Other Species 22 ½ per 1000
    board feet log scale, International
    ¼” Kerf Rule

    4) Pulpwood, excelsior wood, (a) Pine 7 ½ per standard cord of
    chemical wood, bolts and 128 cubic feet
    billets, fuel wood, and other (b) Other Species 11¼ per standard
    products customarily sold by cord of 128 cubic feet
    the cord:

    5) Chips manufactured from (a) Pine .... 0.156 per 100 lbs
    round wood and customarily (b) Other Species...0.234 per 100 lbs.
    sold by the pound.

    6) Railroad cross ties: (a) Pine ½ per piece
    (b) Other Species 1 per piece

    7) Posts, and mine ties, mine props, (a) Pine 4' length or less,
    round mine collars and other 6 per 100 pieces
    types of timber used in connection (b) Other Species 4' length or
    with mining and ordinarily sold by less, 9 per 100 pieces
    the piece: (c) Pine over 4' but not over 8', 9 ¾ per 100 pieces
    (d) Other Species over 4' but not over 8', 14 ¼ per 100 pieces
    (e) Pine over 8', 12 per 100 pieces
    Taxpayer may elect to pay taxes on (f) Other Species over 8’, 18
    products in this item as follows: per 100 pieces
    (g) Pine 16 ½ per 1000 lineal ft.
                              • (h) Other Species .... 24 3/4(,, per 1000
                                lineal ft.

    8) Piling and poles of all types: .286% invoice value f.o.b. loading point

    9) Keg staves: (a) Pine 1 ½ per standard 400 inch
    bundle
    (b) Other Species 1 ½ per standard
    400 inch bundle

    Keg heads: (c) Pine 4 ½ per 100 heads
    (d) Other Species 4 ½ per
    1000 heads
    Tight cooperage: (e) 4 ½ per 100 staves
    Tight cooperage: (f) 9 per 100 heads

    10) Any other type of forest products The State Tax Commissioner
    not above enumerated: shall determine a fair unit
                              • tax rate, based on the cubic foot wood volume relationship between the product and the cubic foot volume of 1000 feet board measure of pine lumber when the product is pine or on the unit rate of hardwood lumber when the product is a species other than pine.

    11) Annual tax for small manufacturers (a) 300,000 to 500,000 board
    of rough lumber: feet $60.
    (b) less than 300,000 board
    feet $30.

    NOTE: The above alternative rates are applicable only in the event that the General Assembly fails to appropriate Forest Products Tax revenue for reforestation of pine timberland activity. In such event, notification of applicable rates will be provided by the Department of Taxation.

    630-19-1606 and 1607. OPTIONAL RATES FOR CERTAIN MANUFACTURERS AND SEVERERS. A. Generally. Any manufacturer of rough lumber who manufactures less than 500,000 board feet, or any person who severs for sale 100 or less cords of fuel wood, or any person who severs 500 or less post's for fish net poles, during any one calendar year, may elect to file an annual forest products tax return.
      • a) Manufacturers of rough lumber who annually manufacture between 300,000 and 500,000 board feet may pay an annual flat tax of $460.
      • b) Manufacturers of rough lumber who annually manufacture less than 300,000 board feet may pay an annual flat tax of $230.
      • c) Any person who severs for sale 100 or less cords of fuel wood, or any person who severs 500 or less posts for fish net poles, during any one calendar year may elect to file an annual forest products tax return in lieu of quarterly returns and pay the tax rates as set out in Regulation 630-19-1604.

    B. Limitation on Tax for Certain Manufacturers. In the event the General Assembly fails to appropriate from the State's general fund an amount which at least equals the revenue estimated to be collected from the pine reforestation program, the alternative annual rate shall apply upon manufacturers taxed pursuant to the provisions of Regulation 630-19-1605.
      • a) Manufacturers of rough lumber who annually manufacture between 300,000 and 500,000 board feet are required to pay an annual flat tax of $60.
      • b) Manufacturers of rough lumber who annually manufacture less than 300,000 board feet are required to pay an annual flat tax of $30.
      • NOTE: The above alternative annual rates in sub§ B are applicable only in the event that the General Assembly fails to appropriate Forest Products Tax revenue for reforestation of pine timberland activity. In such event, notification of applicable rates will be provided by the Department of Taxation.

    630-19-16.08. EXEMPTIONS. Generally. Forest products severed or cut by an individual owner from his own premises for his own use are exempt from forest products tax. For purposes of this exemption, the phrase "for his own use" means and is limited to the utilization of forest products by individual owners of timber in 1) construction or repair of their structures, buildings or improvements; 2) for their home consumption; or 3) for use by them in processing their farm products.

    The tax does not apply to forest products severed and used by State educational institutions for experimentation in and teaching of forestry if such products are severed from land owned by the State.

    630-19-1609. PAYMENT, COLLECTION AND DISPOSITION OF TAX.
    A. Generally. The tax imposed upon forest products is payable to the Department of Taxation by the manufacturer or shipper as defined by Regulation 630-19-1601. The tax is payable quarterly except by a manufacturer or severer who qualifies and elects to pay an annual tax under the alternative provisions of Regulation 630-19-1606 and 1607.

    B. Disposition of Tax.
    The tax collected by the Department of Taxation shall be paid into the State Treasury and the specific amounts as listed below for pine shall be credited to a special fund titled "Reforestation of Timberlands State Fund," and shall be used for reforesting the privately owned pine timberlands of the state. The remainder of the tax as regulated in 630-19-1604 shall be credited by the Comptroller to the "Protection and Development of Forest Resources of the State Fund." Taxes credited as special revenues for protection and development of forest resources shall be used for the purpose of raising, planting and propagating seedling trees, both hardwood and softwood. In addition, the protection and development funds will be used for forest fire protection, forestry education of the public in the use of forest harvesting methods, and rendering forestry service to the timber landowners of the state.

    1. The proceeds of the tax imposed by § 58.1-1602 which are used in pine reforestation of timberlands are as follows:

    Kind of Pine Products Tax Rates

    Pine lumber $1.00 per 1000 feet board
                            • Measure

    Pine logs $1.00 per 1000 board feet,
    NOTE: Applicable only to International
    timber sold as logs and not ¼ “ Kerf Rule.
    converted into lumber or
    other products in this state.

    Pine veneer logs $1.00 per 1000 board feet
    • log scale, International
      4" Kerf Rule.

    Pine pulpwood, excelsior wood, 40 per standard cord of
    chemical wood, bolts or billets, 128 cubic feet.
    fuel wood, and other products
    customarily sold by the cord.

    Pine chips manufactured from .83 per 100 pounds
    round wood and customarily sold
    by the pound.

    Pine railroad crossties 3.3 per piece

    Pine posts, and mine ties, mine 4' length or less, 32, per
    props, round mine collars and 100 pieces over 4' but not
    other types of timber used in over 8', 52 per 100 pieces connection with mining and over 8', 64 per 100 pieces
    ordinarily sold by the piece or 88 per 1000 lineal feet

    Pine piling and poles 2.02% invoice value f.o.b.
                • loading out point
    Pine keg staves 3.3C per standard 400 inch
                            • Bundle
    Pine keg heads 10 per 100 heads

    Any other type of pine forest A proportionate amount
    products not above enumerated: between tax paid per item
                                  • as in Regulation 630-19-1604 and the rate per item above.

    630-19-1610. ALTERNATIVE PAYMENT, COLLECTION AND DISPOSITION OF TAX.
    A. Generally. The alternative tax imposed upon forest products is payable to the Department of Taxation in the same manner as the tax regulated in 630-19-1609.

    B. Disposition of Alternative Tax. The tax collected by the Department of Taxation shall be paid into the State Treasury and credited to a special fund titled "Protection and Development of Forest Resources of the State Fund." Taxes credited as special revenues for protection and development of forest revenues will be used for the purpose of raising, planting, and propagating seedling trees, both hardwood and softwood. In addition., the protection and development funds will be used for forest fire protection, forestry education of the public in the use of forest harvesting methods, and rendering forestry service to timber landowners by the state.

    630-19-1611. ALLOCATION OF TAX TO LOCALITIES. Generally. At least 50% of the forest products tax collected from any county or city shall be allocated and subsequently expended in such county or city for carrying out the purposes of the forest products tax. Any allocated county or city forest products funds, unexpended within a two year period, shall be credited at the end of each fiscal year, as special revenues for expenditure on a statewide basis for reforestation purposes.

    630-19-1612 and 1613. RETURNS TO BE FILED BY MANUFACTURER OR SHIPPER;
    TIME OF PAYMENT OF TAX.
    A. Generally. Every manufacturer or shipper of forest products as defined by Regulation 630-19-1601 shall file a forest products tax return with the Department of Taxation.

    B. Return due date. The forest products tax return must be filed with the Department of Taxation no later than April 30, July 30, October 30, and January 30.

    1. Election alternative to quarterly due dates. Any manufacturer of rough lumber who manufactures less than 500,000 board feet, or any person who severs for sale 100 or less cords of fuel wood, or any person who severs 500 or less posts for fish net poles, during any one calendar year, may elect to file an annual forest products tax return as regulated in 630-19-1606 and 1607.
    • a) Any manufacturer, or person who qualifies and elects to file annually with the Department of Taxation, must file such annual return within thirty days after December 31 of each year and certify that the quantity of forest products is true and correct and meets applicable quantity and rate limitations, if any.

    C. Return information. Each return filed by the manufacturer or shipper must be on forms prescribed by the Department of Taxation. Each return must disclose the kinds of forest products and the gross quantity of each product a) manufactured or b) severed in this State and shipped or sold for shipment outside of this State in an unmanufactured condition during the preceding quarter; the cities or counties in which such products were severed from the soil, and the gross quantity of each product; the amount of tax due on each type of forest product; and any other reasonable and necessary information requested by the Department of Taxation for enforcing the tax on forest products.

    D. Payment of tax. At the time of filing the return, the manufacturer, severer, or shipper must pay the amount of tax due.
      • 1) For forest products piece rates, see Regulation
        • 630-19-1604.
      • 2) For forest products annual return rates, see Regulations 630-19-1604 or 1606.

    630-19-1614. REPORTS TO BE MADE BY TRANSPORTERS OF FOREST PRODUCTS.

    A. Generally. The State Tax Commissioner may request transporters of forest products to report information relative to the transportation of forest products which may include shipments of forest products out of, within, or across Virginia, the name of the shipper, date of shipment, quantity and type or character of such forest products, applicable units or measurements of the forest products, the point of receipt or shipment, the point of destination, and such other information as the Commissioner deems necessary.

    B. Exception. Common carriers using bills of lading or way bills prescribed or approved by the Interstate Commerce Commission shall not be required to report all information relative to the transportation of forest products to the State Tax Commissioner. Such common carriers shall be required to keep the usual records required for bills of lading and way bills at their offices in Virginia where such records are usually maintained.

    C. Failure to file transporter's report. Any transporter who fails to file the report requested on forest products transported shall, upon conviction; be guilty of a Class 3 misdemeanor.

    630-19-1615. WHEN DEPARTMENT MAY MAKE RETURN FOR DELINQUENT TAXPAYER; PENALTY.

    A. Generally. If any taxpayer, subject to forest products tax, fails to file any required forest products return, the Department may request by registered mail that the taxpayer file such delinquent return. If the taxpayer fails to file the required forest products return within 30 days after receiving written notice from the Department, the Department may make the return for the delinquent taxpayer upon the basis of available information and assess the taxes due upon such return.

    B. Penalty. If the taxpayer fails to file the return which is due and the Department assesses the tax, it shall add a penalty to the tax for failure to file the return and pay the applicable tax. The penalty shall be twenty-five percent of the assessed tax due and shall be collected as a part of the tax.
        • 1) The Department may waive all or a part of the 25% penalty if, in its discretion, good cause is shown by the taxpayer.
    C. Interest. The total assessment of tax and penalty shall bear interest at the rate determined in accordance with § 58.1-15 from the date such taxes were due.

    630-19-1616. ABSCONDING TAXPAYER. -NOT REGULATED.

    630-19-1617. RECORDS TO BE KEPT.
    A. Generally. Every manufacturer in this State and every shipper of forest products who ships out of this State such products in an unmanufactured condition, must keep and preserve adequate books and records on the forest products for at least three years following the date the tax is reported on such products.
      • 1) "Adequate books and records" means records which separate the forest products into the various categories on which tax rates are computed and such other books and accounts as may be necessary to determine the amount of applicable tax.
        • 2) Exception. Manufacturers of rough lumber who manufacture less than 500,000 board feet, or any person who severs for sale 100 or less cords of fuel wood, or 500 or less posts for fish net poles, during any one calendar year, are excepted from the requirements to keep and preserve records which separate forest products into the various tax categories.
    B. Examination by Commissioner. The Commissioner may examine during the usual business hours of the day records, books, papers, or other documents of the forest products manufacturer or shipper relating to the quantity and type of forest products, the cities or counties in which such products were severed and the amount of tax due on each type of forest product and to verify the truth and accuracy of any statement or any other relevant information.

    630-19-1618. PENALTY FOR FAILURE TO MAKE RETURN, KEEP RECORDS, OR PERMIT EXAMINATION OF RECORDS. Generally. Any person who fails to file a forest products tax return, refuses to permit examination of records, or fails to keep the required records shall be guilty, upon conviction; of a Class 4 misdemeanor.

    Each month's failure to make the required return or keep the required records and each refusal of a written demand of the Department to examine, inspect, or audit forest products records will constitute a separate offense.*

    630-19-1619. PENALTY AND INTEREST FOR FAILURE TO PAY THE TAX WHEN DUE. Generally. Any person who fails to pay the forest products tax when due shall pay in addition to the tax, a penalty of five percent of the amount of unpaid tax.

    The total assessment of tax and penalty shall bear interest beginning six months from the date the tax became due and payable. Interest will be at the rate determined in accordance with § 58.1-15. The penalty and interest will be assessed and collected as if a part of the tax.*

    630-19-1620, 1621, 1622. AUDIT OF RETURNS; TAX UNDERPAID; AMENDED
    RETURNS AND TAXPAYER APPEALS.
    A. Generally. After the taxpayer files the required returns, the Department of Taxation may examine or audit the forest products tax returns and records and other information of the taxpayer within three years after the returns were filed and determine the correctness of such returns.

    B. Tax overpaid. If the Department determines that the tax is overpaid on the forest products tax return, the Department of Taxation will refund to the taxpayer any tax which was overpaid.
      • 1) All refunds of forest products tax shall be paid out of the Reforestation of Timberlands State Fund or the Protection and Development of Forest Revenues State Fund, whichever account is applicable.

    C. Tax underpaid. If the Department determines within three years after the forest products tax return is due that the tax is underpaid, the Department of Taxation shall assess the taxpayer for any tax due together with applicable penalties and interest as regulated in 630-19-1619.
      • 1) Any taxpayer who disagrees with a forest products tax audit assessment may file an application for relief to the State Tax Commissioner. Such application must be made within ninety days from the date of assessment.

    D. Amended return. If a taxpayer overpays the forest products tax, an amended return requesting refund of the overpaid tax must be filed with the Department within one year from the date such tax was due.
      • 1) The taxpayer must file amended forest products tax returns for each period showing the correct amount of tax due and attach an explanation to the corrected returns.

        2) The Department shall review the taxpayer's explanations and amended returns and shall make a determination upon such tax refund request.

        3) All refunds of forest products tax shall be paid out of the Reforestation of Timberlands State Fund or the Protection and Development of Forest Revenues State Fund, whichever account is applicable.

    NOTE: The return of a Taxpayer filed with the Department is treated, for forest products tax purposes, as a self-assessment. § 58.1-1622 limits the taxpayer to one year from December 31 of the year the assessment was made to apply to the Department for refund or appeal to the Commissioner or appeal to the courts. Protective claim for refund rights under § 58.1-1824 are not applicable to the taxpayers subject to forest products tax because of the one year appeal limitation under § 58.1-1622.

    E. Penalties. In addition to assessing the tax, the Department shall assess a penalty on the unpaid tax.
      • 1) If the taxpayer files the forest products tax return and underpays or fails to pay the tax when due, the Department shall assess a penalty of five percent of the amount of unpaid tax.
    • 2) If the Department in audit finds a tax deficiency the taxpayer shall be notified of the tax and interest due. If the taxpayer fails to pay the tax and interest due within thirty days from the date notified, the Department shall assess a penalty of ½ of 1% per month from the date such taxes were due.
    • 3) If the Department finds willful or fraudulent intent by the taxpayer to evade the tax due, it may assess an underpayment penalty of 25% of the tax due.
    • 4) The Department may waive all or part of the penalties if, in its discretion, good cause is shown by the taxpayer.

    F. Interest. The total assessment of tax and penalty shall bear interest at the rate determined in accordance with § 58.1-15. The penalty and interest shall be assessed and collected as if a part of the tax.

    G. Taxpayer appeals. Any taxpayer who is aggrieved by a forest products tax assessment must apply to the Department for correction or apply to court for correction within one year from December 31 of the year in which the assessment was made. (Re: Note to C above)
      • * This is statutory language. No further interpretation is required.

    Rulings of the Tax Commissioner

    Last Updated 08/25/2014 16:46