What is Current Use?
The Use Value Appraisal Program (UVA), or more commonly called Current Use, was implemented in 1978 by the Legislature and enables farm and forest landowners who practice long-term management to have land appraised for its “use value” rather than at fair market value. Current Use is a tax equity program and the single most important tool to preserve Vermont’s working landscape. The Vermont Tax Department administers the program and the current use advisory board sets tax rates annually. The governing statute is 32 V.S.A. Chapter 124
Current Use is a tax equity program. It taxes farm and forestland for its value as remaining productive farm and forest land rather than its worth at fair market value.
Productive farm and forestland is the key to current use. All land enrolled in this tax program must be managed productively: all woodlands enrolled in current use must have a management plan that includes harvesting timber. This does not mean that timber must be harvested every year but that timber will be harvested when appropriate for forest conditions.
There are more than 18,400 properties enrolled in Current Use. Vermont is 5.4 million acres in size; 4.5 million acres are in forest and woodlands and 794,000 acres are agricultural. Roughly half of the eligible properties, or about 2.4 million acres of our working landscape, are enrolled in Current Use. Private landowners own 80 percent of the forested landscape, while local municipalities, the State of Vermont, and the federal government own 19 percent. Industrial landowners hold the remaining 1 percent.
Applying for Current Use in Vermont
Current Use is administered by the Division of Property Valuation and Review (aka PVR). The guidelines for application can be found on their website at the link above. There are several ways to apply, either online with the ecuse system or by submitting Form CU-301. Deadline for new enrollment is September 1; or October 1 for new parcels and additions. Familiarize yourself with the requirements and guidelines to ensure that it’s right for you.
You must have 25 contiguous acres of forestland and an approved forest management plan that is updated every ten years.
Licensed Consulting Foresters List
In 2016, Vermont instituted licensing for foresters. Anyone practicing forestry in the State, whether for private or public entities, must have a license that is renewable every two years. The Secretary of State, Office of Professional Regulation, maintains and approves licenses for foresters.
Vermont Woodlands maintains membership for Licensed Consulting Foresters, or the subset of foresters whose focus is working for landowners like you. We recommend that you review the Directory for a forester near you. Then pick up the phone and call to discuss enrollment in Current Use. You will need a management plan and maps as well as other documents found on the PVR website before you can enroll.
If you are thinking about enrolling in Current Use, speak to a forester today. Management plans are not written overnight.
Our consulting foresters are very busy people who must work within constraints of weather and other timelines and serve many landowners. If you don’t have a consulting forester and need one, reach out now to make that initial contact. We suggest you speak to a few folks in your area to select a consultant as this may well be a long-lasting relationship.
The Forest Taxation and Estate Planning Program, under the United States Department of Agriculture State and Private Forestry, Cooperative Forestry Program, delivers national leadership on forest tax policy critical to private forest stewardship and serves as a trusted source of information on the complex tax issues associated with forest management.
With new federal tax laws and programs, it pays to be informed. Visit the USDA website for forestland owners.
Most foresters and landowners are not well versed in tax law but there are experts. Timber Tax Specialist Linda Wang is a go-to source for all your tax questions. Wang travels the country delivering workshops to private landowners, foresters, timber business owners, accountants, and tax preparers, as well as online webinars on updated tax laws affecting timberland owners. Each year, she also updates Tax Tips for Forest Landowners.
Vermont is one of twelve states, plus Washington, D.C., that levies an estate tax. The estate tax, sometimes referred to as the “death tax,” is a tax on the estate of a person who recently died. It is levied on the money or assets in an estate before it is passed on to a person’s designated heirs. The estate tax only applies to estates that reach a certain threshold. Unlike the other states, though, Vermont’s estate tax is flat. If your estate is worth more than the $2.75 million exemption, the state taxes the excess at a rate of 16%, with no progressive rates or tax brackets involved. Unlike federal law, the Vermont estate tax exemption is not portable for married couples. That means that your spouse’s exemption does not pass to you on his or her death.
Estate tax is different than inheritance tax. The latter is levied on money or property after it’s dispersed to beneficiaries. Vermont does not have an inheritance tax.
If you are a Vermont resident and thinking about estate planning, you’ll want a professional to help you plan your estate.
There is also no gift tax in Vermont. The federal gift tax has a $15,000 exemption per year per recipient. That means you can give up to $15,000 to as many people as you want in a given year without worrying about the gift tax. You must report any gifts to a person that are above that amount in a given year. The excess counts against your lifetime gift tax exemption of $11.18 million and reduces your federal estate tax exemption.
VT Current Use Tax Calculations
Tax rates are set by the Current Use Advisory Board each year. The board’s purpose is to help maintain Vermont’s productive agricultural and forest land, preventing conversion to more intensive use. The members include experts in forestry and agriculture, local government, and real estate listers. The current rates are:
|Forest Land & Conservation Land||$145/acre|
|Forest Land & Conservation Land Greater than one mile from a Class 1, 2, or 3 Road||$109/acre|
VT Latest Tax Updates
Find Vermont’s latest tax information on the Vermont Department of Taxes website. To visit their site, click here.