Since June 2013, the Qualified Forest Program in the Michigan Department of Agriculture and Rural Development has enrolled more than 370,000 acres of private forestland in the state of Michigan. Enthusiasm for the program continues to grow with new options for enrollment available to landowners based on recent legislative changes.
To be eligible for enrollment in QFP, landowners must have a current forest management plan, written by a forester registered with MDARD. To qualify for the program, forested parcels have to be at least 20 acres, but not larger than 640 acres, per taxing unit (typically a township).
Parcels 20 to 39.9 acres have to be at least 80% stocked with forest capable of producing forestry products, while parcels 40 to 640 acres must be at least 50% stocked with the same capabilities as previously mentioned.
In the event that a landowner cannot meet the stocking requirements, Public Act 107 of 2015 provides another option for landowners to enroll in the QFP. The legislation allows for the combination of agricultural use property with productive forest property, allowing mixed-use landowners to enroll their property under the Qualified Forest designation. Similar to the regular QFP program, landowners of mixed-use parcels need to have a forest management plan in place prior to their enrollment in QFP.
QFP now provides three separate tax benefits for landowners:
• With a Qualified Forest School Tax Affidavit, enrolled land becomes exempt from a maximum of 18 mills of school operating taxes on non-homestead property.
• The Qualified Forest Taxable Value Affidavit prevents the uncapping of a parcel’s taxable value when a QFP-enrolled parcel changes ownership. This can provide significant tax savings to the new landowner, provided they remain enrolled in QFP.
• The Transitional Qualified Forest option is the most recent legislation. The TQF option allows for landowners currently enrolled in the MDNR’s Commercial Forest program to transfer their property into QFP under waiver of penalty, and provides for an incremental increase in tax liability for the following five years. Ownership and acreage restrictions do apply, and the TQF option is only in place until Sept. 1, 2021.
As part of their continued enrollment in QFP, landowners pay a 2-mill equivalent fee annually. This fee is deposited into the Private Forestland Enhancement Fund, which supports opportunities for future timber supplies, forestry-related employment opportunities, and the conservation, maintenance and enhancement of a sustainable private timber resource.
Applications must be submitted by Sept. 1 to be considered for the tax exemption in the 2018 tax year. For more information, contact the QFP staff at 517-284-5630 or [email protected]