Greetings Amy:
The sale of timber/logs in the State of Illinois is subject to a mandatory 4% timber harvest fee, pursuant to IL Timber Buyer Licensing and Harvest Fees statutes and administrative codes. The 4% harvest fee is collected by the licensed timber buyer and reported/submitted to the Illinois Department of Natural Resources on behalf of the authorized Timber Grower (i.e., the landowner selling the timber is the authorized timber grower).
Example: Let's say the highest gross bid for your timber sale was $10,000. The licensed timber buyer is required to collect and report/submit $400 (4% timber harvest fee on the $10,000) to the Illinois Department of Natural Resources on your behalf. Therefore, your total payment from the licensed timber buyer would be $9,600. Please note that your $9600 timber sale income will likely need to be adjusted on your IRS tax forms as the IRS affords forest landowners certain deductions when dealing with timber sale income (gross income from timber sales less state harvest tax, timber basis, professional forester fees, boundary surveys, etc.).
For detailed information regarding how to handle and report timber sale income, please visit the National Timber Tax Web site:
www.timbertax.org
Hope this helped!
