California Lumber Tax Dropped

A proposed 1% additional sales tax on selected lumber products that was part of Governor Jerry Brown’s attempt to close a state budget gap has been dropped, much to the relief of California LBM dealers. The tax pitted retail lumber sellers against lumber producers by shifting fees the timber industry currently pays to its customers.

The 1% tax would have been used to fund the regulatory activities of four state agencies involved in reviewing and monitoring timber harvest plans that are required for all private and public timber cutting. Currently, those costs are paid by the landowners and from state general fund expenditures. The proposal to shift the program costs to the retail lumber dealers was supported by the California Forestry Association.

The Lumber Association of California and Nevada (LACN) lobbied hard against the tax, citing the additional cost and complexity of setting up a new tax collection system. It was also unclear exactly which wood products would be subject to the tax, the LACN pointed out.

LACN disagreed with that proposal and advocated that the fees should remain as they are and not be an additional cost to consumers. The timber industry wanted the fees to be passed on to the end user to lessen the competition they face from timber produced outside California and thus not subject to California regulations.

From HBS Dealer: hbsdealer.com.