Removal from Designated Forest Land and Compensating Taxes

How can the land be removed from Designated Forest Land?


Land may be removed from designation by the owner if:
After (1) the Assessor provides the owner written notification and (2) the owner is given an opportunity to respond, land may be removed by the Assessor if:
  • The Assessor determines that the land is no longer primarily devoted to and used for growing and harvesting, or
  • The owner did not comply with a final administrative or judicial order with respect to a violation of the restocking, forest management, fire protection, insect and disease control, and forest debris provisions of Title 76 RCW or any applicable rules under Title 76 RCW.
  • The Assessor determines that restocking the land has not occurred to the extent or within the time specified in designation application and the Forest Management Plan.

When is Removal of Land not Subject to Compensating Tax?


The additional tax, applicable interest, and penalty shall not be imposed if the removal of classification results solely from: 
  1. Land is transferred to a government entity in exchange for other land located in the State of Washington,
  2. Land taken through the exercise of the power of eminent domain, or sale of transferred in anticipation of the exercise of such power was received in writing or by other official action, 
  3. A natural disaster changes the use of such land,
  4. Official action by the state, county, or city disallows the present use of such land,
  5. Transfer of land to a church when such land would qualify for exemptions granted thereto, 
  6. Acquisition of property interests by state agencies or agencies or organizations qualified under RCW 84.34.210 and 64.04.130 (See RCW 84.34.108(5f)), or
  7. The sale or transfer of land within two years after the death of the owner of at least a fifty percent interest in the land if the land has been assessed and valued as classified under this chapter continuously since 1993.

Compensating Tax


Compensating tax recaptures that would have been paid on the land if it had been assessed and taxed at its true and fair value instead of forest land value. The Assessor uses the following 4 elements to calculate compensating tax:
  • current year's levy rate,
  • the last assessed forest land value, 
  • the true and fair value as of January 1st of the year of removal from designation, and
  • the number of years in designation (not to exceed 9 years).
Prior Year's Compensating Tax. The amount of compensating tax is the difference between the last Designated Forest Land value and the new assessed value of the land. This amount is then multiplied by the last levy rate extended against the land and multiplied by the number of years the land was designated as forest land, not to exceed nine years.

DFL Tax
Remainder of Current Year Compensating Tax. Compensating taxes will also be due on the land from January 1 of the year the designation is removed up to the removal date.

Please ensure that you understand the potential tax liabilities associated with removing land designation.