Wood products industries around the world know about the trees that grow in West Virginia.
Appalachian hardwoods that grow here have a reputation for quality that is unsurpassed.
But harvesting those trees costs significantly more than it does in surrounding states, said Dick Waybright, executive director of the West Virginia Forestry Association. One of the primary concerns is the state's severance tax, which is based on gross receipts rather than profits.
"It's a tough tax to swallow," he said. "It did have its benefits. It fixed workers' comp," he said, referring to timber taxes earmarked for workers' compensation debt reduction.
"We're the only (state) in the area with a severance tax. Virginia has an end-user tax, but that's small. It's very minute."
Waybright referred to a report entitled compiled the West Virginia University Division of Forestry and Natural Resources. That study, published in May 2006, reveals that timberland property taxes in the region are highest in Maryland, with $2.12 per acre, and West Virginia, with $1.97 per acre.
When yield taxes, fuel taxes and property taxes are totaled, West Virginia is highest with $21.29 per acre. Kentucky is lowest at $8.93 per acre.
"(The report) pointed out that one reason other states, like Ohio and Virginia, don't seem to be affected as much is because they have larger populations that can use those products," Waybright said. "West Virginia doesn't have that. We depend on exporting our products."
The industry would like to see taxes reduced to help spur growth, Waybright said. High taxes and regulations have all but eliminated the timber industry in other states.
"Maine is the most forested state in the nation, but they have no timbering industry," he said. "They left because of regulations and taxes."
But the tax problem might be overstated, said Randy Dye, state forester and director of the West Virginia Division of Forestry.
"I don't know that the taxes are significant enough to add to the present economic downturn," he said. "When things are good, taxes are OK. When times are tight, people look at everything they can to save money."
It is understandable that industries would advocate lowering taxes during market downturns, Dye said. That is especially true with a business such as timbering, where there are few ways to cut costs.
"Raw material is 60 percent of their costs," Dye said. "That's really high. There's only so much they can do beyond that to scratch out a profit."WTRF-TV
