The Current State of Current Use

The six New England states and New York each have some sort of property tax system in place specifically for owners of forestland. These programs are generally referred to as “current use” programs, meaning that they are designed to tax forestland on its current use (growing trees) rather than on its potential use (growing houses or other human infrastructure). A parcel of land’s development potential is usually described by tax assessors as its “highest and best use,” which refers, of course, not to its ecological value but rather to its ability to maximize revenue for the owner and, incidentally, the taxing agency.

So why not tax land on its “highest and best use?” Quite simply, so that landowners aren’t forced to sell their land in order to pay the tax bill. Taxing land on its development potential creates the persistent (though often inadvertent) pressure on the landowner to do just that: develop it. You can’t grow enough trees to pay a bill that’s being assessed on your ability to grow houses. Many people faced with this situation are forced to sell.

Current use programs provide an escape clause for those landowners who genuinely wish to continue growing trees. Though the details of the programs vary from state to state, here’s the general picture: if a landowner is willing to commit in advance to forgo the right to develop the land, and if a state-approved forester or assessor verifies that the land is, indeed, suitable for (and currently being used to) grow trees, then the land will be taxed at a lower rate. Depending on the development pressure in a particular area, this can be a far lower rate – 10 percent of what it might otherwise have been. Should landowners later have a change of heart and decide to develop after all, they are required to pay a penalty that recoups for the state some or all of the past tax savings.

The economic justification for current use programs is that undeveloped land requires far fewer governmental services than developed land and should, therefore, shoulder a proportionally smaller piece of the overall tax bill. Undeveloped forestland, by definition, has no roads, businesses, or houses and hence requires little or no road maintenance, little or no police and fire protection, and no schooling for children. Since the bulk of all property taxes in the northeastern states is used to fund local education, taxing forestland at the same rate as developed land is effectively requiring the trees to subsidize the schools.

There is an ecological rationale for current use programs as well. Large parcels of undeveloped forestland provide: clean air, clean water, and flood mitigation to the communities around them; habitat for a broad range of wildlife from the tiniest insects to the largest mammals; a resource base for the people who work in logging, forestry, and wood products businesses; and abundant recreational opportunities from hunting to bird watching to simply taking a walk. The larger the parcel, in general, the more “ecological services” it provides to society.

Despite these advantages, however, current use programs have drawbacks. One is that current use treats the symptoms, not the disease – the disease in this case being an approach to property valuation dating from Colonial days that is no longer a reasonable indicator of either wealth or ability to pay. Another is that current use programs are often perceived as either tax breaks for rich people or as programs that shift property taxes from one group (large landowners) to another group (all other landowners), who themselves are not necessarily in a better position to foot the bill.

Nevertheless, current use programs are the way that every northeastern state government at present attempts to address the issue of long-term forestland taxation. The programs vary from state to state, and many states, in addition, have current use options for farmland and open space. To learn more about the program in your state, consult the accompanying table.






Minimum Acreage 25 (for forestry) 10 10
Tax Valuation Determined by local assessors Five percent of fair market value or $10/acre Set each year by county and wood type
Management Plan Required? No; certified forester must assess the land Yes Yes
Withdrawal Penalty Determined by local assessors Five years back taxes plus penalty 20-30% of difference between fair market value and valuation for tree growth
Application Deadline October 31 July 1 April 1
Web Address



New Hampshire

New York

Rhode Island

Minimum Acreage 10 50 10
Tax Valuation $15/acre-$170/acre, depending upon management Approximately 20% of fair market value Set by towns; roughly $120/acre
Management Plan Required? No Yes Yes
Withdrawal Penalty 10% of fair market value 2.5 times the accumulated tax savings plus interest Up to 10% of fair market value
Application Deadline April 15 January 1 Rolling
Web Address


Minimum Acreage 25 (for forestry)  
Tax Valuation Either $95 or $127/acre, depending upon road access  
Management Plan Required? Yes  
Withdrawal Penalty 10 or 20% of fair market value, depending on time enrolled  
Application Deadline September 1  
Web Address  

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