Illinois Administrative Code › Title 17 - CONSERVATION › Part 1535 - TIMBER BUYER LICENSING AND HARVEST FEES › Section 1535.20 - 4% Harvest Fee Determination

Current through Register Vol. 48, No. 28, July 12, 2024
a)
When a timber buyer buys timber in
			 this State, the timber buyer and timber grower shall determine the amount to be
			 paid for such timber, or the value of items to be bartered for such timber, and
			 the timber buyer shall deduct from the payment to the timber grower an amount
			 which equals 4% of the purchase price or 4% of the minimum fair market value,
			 as determined pursuant to administrative rule, when purchase price cannot
			 otherwise be determined and shall forward such amount to the Department of
			 Natural Resources.
[225 ILCS
			 735/9a(a) ]
EXAMPLE 1:
Harry Harvester, an Illinois Licensed Timber Buyer, recently
				won a bid to purchase $100,000 worth of timber from Larry Landowner, a Timber
				Grower. Harry would report the sale to the Department and submit a payment of
				$4,000 for the Harvest Fee ($100,000 * 0.04 = $4,000). Larry Landowner would
				receive a payment from Harry Harvester of $96,000 for his timber ($100,000 -
				$4,000 = $96,000).
EXAMPLE 2:
Harry Harvester, an Illinois Licensed Timber Buyer, is cutting
				timber on shares for Larry Landowner, a Timber Grower. Harry paid Larry $50,000
				for the timber removed from Larry's property. Harry would report the sale to
				the Department and submit a payment of $2,000 for the Harvest Fee ($50,000 *
				0.04 = $2,000). Larry Landowner would receive a payment from Harry Harvester of
				$48,000 for his timber ($50,000 - $2,000 = $48,000).
EXAMPLE 3:
Larry Landowner, a Timber Grower, brings a small trailer of
				logs to Harry Harvester's sawmill, an Illinois Licensed Timber Buyer. Harry
				pays Larry $300 for the logs. Harry would report the sale to the Department and
				submit a payment of $12 for the Harvest Fee ($300 * 0.04 = $12). Larry
				Landowner would receive a payment from Harry Harvester of $288 for his timber
				($300 - $12 = $288).
EXAMPLE 4:
Harry Harvester, an Illinois Licensed Timber Buyer, sells
				$5,000 worth of logs he has purchased from multiple landowners to Sammy
				Sawmill, who is not an Illinois Licensed Timber Buyer. Harry Harvester reported
				the sale to the Department and paid the harvest fee when he purchased the logs
				from the landowners and should not report the sale to Sammy Sawmill as this
				would result in duplicated reporting.
EXAMPLE 5:
Larry Landowner, a Timber Grower, is wanting to sell 20 walnut
				logs he recently cut from his property to Sammy Sawmill, who is not an Illinois
				Licensed Timber Buyer. Sammy Sawmill should not purchase these logs from Larry
				Landowner because he is not an Illinois Licensed Timber Byer. However, Sammy
				may purchase these logs if Larry Landowner has already reported the sale and
				paid the harvest fee to the Department.
b) The value of timber purchased shall be the
			 gross amount received by the timber grower and paid by the timber buyer for any
			 interests involved in the timber purchase.
c) When timber is purchased in whole or in
			 part by barter, the fair market value of the bartered item or service used as
			 payment for stumpage or logs to the timber grower shall be used in determining
			 the harvest fee due the Department of Natural Resources. Any payment made from
			 any source shall require a 4% harvest fee payment to the Department. The
			 following formula shall be used: Aggregate Value of Timber x 0.04 = 4% fee to
			 be paid to the Department.
EXAMPLE:
Larry Landowner, a Timber Grower, has requested that Harry
				Harvester, an Illinois Licensed Timber Buyer, repair his gravel road on his
				property. In lieu of payment for this service Larry will allow Harry to remove
				20 mature poplar trees from his property. Estimated stumpage value of the trees
				removed is $2,000. Harry would report the sale to the Department and submit a
				payment of $80 for the Harvest Fee ($2,000 * 0.04 = $80).
d) If timber is cut from an owner's land
			 without establishing the amount to be paid or the bartered value of the
			 stumpage or logs, such timber or logs shall be valued at stumpage
			 value.
e) For timber cut on lands
			 owned by a timber grower or mill and used by that timber grower or mill in its
			 production process, value will be the minimum fair market value. The Illinois
			 Timber Prices Survey, for the quarter when the timber was harvested, may, but
			 is not required to, be used as a guide for determining value.
EXAMPLE:
Larry Landowner, a Timber Grower, decides to harvest 100 trees
				from his property. He is planning on milling these trees into lumber and
				selling the lumber to local purchasers. Larry estimates the stumpage value of
				these trees to be $12,500. Larry is required to report this to the Department
				along with submitting a payment of $500 for the Harvest Fee ($12,500 * .04 =
				$500). This report and payment must be made no later than 30 days from the end
				of the quarter in which the timber was harvested. Note, if Larry uses the
				lumber for personal use he is not required to submit a report or payment to the
				Department. Additionally, if after submitting a report and payment to the
				Department, Larry later decides to sell his logs to a sawmill, the sawmill
				should not report the sale to the Department nor submit a Harvest Fee as this
				would result in duplicated reporting.