California passes new lumber tax

A proposed 1% additional sales tax on selected lumber products was signed into California law by Gov. Gerry Brown on Sept. 11, resulting in a transfer of fees from the timber industry to retail lumber sellers. 

The new tax will be 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 new tax originated with legislation supported by the California timber industry, which wanted the fees to be passed on to the end user to help level the playing field with timber producers outside California. These timber producers are not subject to California’s heavy regulations, it argued, and thus enjoy a competitive advantage. The new California law will also lessen wildfire liability for landowners, another cost saving. 

Those who opposed the legislation -- a group that included Home Depot, the National Lumber & Building Material Dealers Association (NLBMDA), and the West Coast Lumber & Building Materials Association (formerly the Lumber Association of California and Nevada or LACN) -- believed that the timber industry should not shift the fees to its own customers. 

“Those who are being regulated should pay their own fees and build that into the cost of production,” said Ken Dunham, executive director of the West Coast Lumber & Building Materials Association. Dunham also wondered how lumber retailers build a framework to collect taxes on lumber and engineered wood products by Jan. 1, 2013. “Sales tax in California does not break out lumber,” Dunham told Home Channel News. “The [independent lumberyards] say there is no way they can have the software in place in time.” 

Lastly, there is the issue of exactly what “lumber products” and “engineered wood products” will be taxed. The California Board of Forestry & Fire Protection is scheduled to discuss this issue at a Sept. 12 hearing.

The new law does contain an unusual provision that promises to reimburse the retailer for costs associated with the costs of collection of the assessment. The amount and process will be determined by the State Board of Equalization. Dunham remained skeptical. “When is the check coming?” he asked.

Comments

Today I purchased some exotic

Today I purchased some exotic hardwoods for a couple of home projects and finally took the time to look up the Lumber Assessment Fee on the internet to see what it was for.....been paying it for the last year or so, but just didn't take the time to find out which pocket Governor Brown wanted this time. Well, it's registered on the sales receipt as a fee, kinda like that fire fund they did a couple of years ago, but all the web reference says it's a tax. Another California rip off. The wood I bought was from Africa and not even grown here in California yet it was taxed. Poor California is disadvantage because of regulations in California so to help California just tax all the folks that buy wood to pay for all those CALIFORNIA positions that were created for/by the regulations. Why don't we just get rid of a bunch of these regulations that cause the burden. I think we need a lot less regulators, regulations and so forth in California. I still remember my teacher in High School Carlos Bee whom was not only a teacher but also a legislator. He taught to earn a living and and received a meager wage to legislate and loved it.

What a nightmare. California

What a nightmare. California legislators must have no idea of what it takes to institute a collection procedure like this. Glad I don't own a small lumber yard in California!

This is just another nail in

This is just another nail in the economic coffin of CA. Can the national economy turn around without a financially healthy CA or, as the 8th largest economy in the world sinks further, will the rest of the nation be pulled down into our whirlpool?

"State Board of

"State Board of Equalization"? If that doesn't scream Atlas Shrugged, I don't know what does...

out on the east coast our

out on the east coast our property taxes are so high we ended up using a Nassau county tax grievance specialist to help us fight for lower taxes. If things don't change soon more and more people will be leaving Long Island. Fewer jobs more people graduating with degrees looking for work but to pay over 10,000 in property taxes is insane.