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Our written Woodland Stewardship Plans help our clients qualify for either 2c Managed Forestland or Sustainable Forest Incentive Act (SFIA). Our expert foresters will walk your property and help you determine which program is the best fit for your property. That way you can put money back into your pocket or back into your property!

The first step for either program is to get a written Stewardship Plan.

What's the difference between 2c Tax Class versus SFIA?

Wooded property that qualifies as 2c Managed Forestland benefits from a 35% tax reduction. Private landowners adhering to a qualifying management plan for their woodland receive a special classification rate of 0.65 percent on eligible land.

For the majority of forest land, the classification rate is 1 percent.

The SFIA is ideal for large acreage property with lower taxes. There are three enrollment periods––8, 20, and 50 years. The longer the enrollment period the landowner chooses, the higher their per-acre payment will be.

Every year, the state of Minnesota pays landowners for every acre they own that's enrolled in a covenant. The state requires a written Woodland Stewardship Plan before a private landowner can enroll in the SFIA.

The covenant?

Landowners enrolled in the SFIA must sign a document called a covenant. It's not a contract but a condition of the program established by state law. The covenant states a landowner is following the program's qualifications and will continue to do so for the specified enrollment period–– 8, 20, or 50 years.

The document includes the property's identifier information such as a map, certificate of title number, or legal description and then the covenant restrictions. It is not as scary as it sounds but it is more of a commitment than the 2c program.

Find specific qualifying information for each enrollment period on our Resources page.

How much money will I save?

A landowner's savings will vary depending on the program. Through our written Woodland Stewardship Programs, Northland Habitat helps private property owners choose the most beneficial program for their land.

2c Tax Class:

A forestland valued at $200,000 would have a tax capacity of $1,300 instead of $2,000

• $200,000 x .65% = $1,300
• $200,000 x 1.00% = $2,000

How was this calculated?

This example was simplified and didn't account for additional tax costs or savings that may also apply to the property. There is also some variation in local tax rates that were disregarded for the sake of this example.

SFIA:

While the 2c Tax Class is calculated by the property's value, the SFIA payment amounts are based on the duration of the covenant–– 8, 20, or 50 years. During the enrollment period, the land must abide by the covenant and its restrictions. The statewide average market values and tax rates adjust the payment rate each year, but never by more than 10 percent.

As of 2022, the payment rates are as follows:

• Eight-year covenant:
• Less than 1,920 enrolled acres: $10.09 per acre
• More than 1,920 enrolled acres: $13.98 per acre
• Twenty-year covenant:
• Less than 1,920 enrolled acres: $13.98 per acre
• More than 1,920 enrolled cares: $17.86 per acre
• Fifty-year covenant:
• Less than 1,920 enrolled acres: $17.86 per acre
• More than 1,920 enrolled acres: $21.74 per acre

Note: Land enrolled in SFIA in 2017 with a conservation easement has a payment rate of $7.00 per acre with a limited eight-year covenant.

What are the qualifications?

2c Tax Class:

• Land must have a Woodland Stewardship Plan registered with the Department of Natural Resources
• Property must have at least 20 acres of woodland, with a statewide limit of 1,920
• Enrolled acres must not receive any homestead benefits
• Enrolled acres cannot be used for agricultural purposes
• Landowners cannot include property currently enrolled in SFIA or any other incentive program, including: CRP, RIM, CREP, or Green Acres.

SFIA:

• Landowners must be current on their property taxes
• Have at least 20 contiguous acres
• At least 50 percent of the property must be forestland as defined by Minnesota Statute 88.01 subd. 7
• The property owner must have a Woodland Stewardship Plan registered with the Department of Natural Resources
• Have a covenant that limits the property's use to forest management activities
• The enrolled acres cannot also be in Green Acres, Rural Preserves, Agriculture Preserves, RIM, CRP, or CREP
• The enrolled acres cannot be used for residential or agricultural purposes.
• The enrolled acres cannot be improved with structures, pavement, sewer, campsite, or roads not specified in the forest management plan.
• The enrolled acres cannot be covered under a Lessard-Sams Outdoor Heritage Council easement (or similar) granted after May 30th, 2013.

What if I have a building or cabin on the property?

2c Tax Class:

As a general rule, buildings cannot receive the classification. For example, a structure surrounded by ten acres would receive the classification of the use of the structure, not 2c Managed Forestland.

However, smaller (less than 300 square feet) structures defined as sheds that add minimal value and without residential use can be included on land receiving 2c Tax Class status.

SFIA:

The three acres surrounding a permanent building larger than 300 square feet will not qualify as part of your SFIA acreage. Landowners who plan on building on their property later can simply submit a map with at least three delineated acres when enrolling.

How do I enroll?

2c Tax Class:

The county assessor's office has paper applications, or download a form on our Resources page. Submit your completed form to the county assessor's office in the county where the property is located.

Applicant must submit their paperwork by May 1st for taxes payable the following year. To qualify for 2022 tax assessments, apply by May 1st, 2022. The 2c Tax Class will affect taxes payable in 2023.

Landowners must have valid and registered Woodland Stewardship Plans to submit with their application. The county assessor will not accept applications with pending plans.

SFIA:

1. Landowners must first choose and sign an 8, 20, or 50-year covenant, then register it with the county recorder or registrar in the county where the land is located. It can take up to three months for the county to process the request. Once processed, landowners receive a Covenant Recording Number for their SFIA enrollment application.
2. Once the county recorder processes the covenant and the landowner receives a Covenant Recording Number, they can fill out their SFIA enrollment. Applications are on the Minnesota Department of Revenue website and our Resources page. Submit the application and accompanying paperwork to: Minnesota Revenue Mail Station 3340 St. Paul, MN 55146-3340

By when should forms be submitted?

2c Tax Class:

NEW REGISTRATION: MAY 1ST

New applicants must submit their paperwork to the appropriate county by May 1st to qualify for the current assessment year, with taxes payable the following year. To be eligible for the 2022 tax assessment, submit your application by May 1st, 2022, for taxes payable in 2023.

Note: Your Stewardship Plan must also be submitted for registration to the Department of Natural Resources (DNR) by May 1st when you intend to qualify for the 2c Tax program.

EXISTING REGISTRATION: JANUARY 2ND

Landowners already enrolled in the 2c Tax Class who have an expired Stewardship Plan must submit an updated plan to the DNR by January 2nd to enable assessors to maintain the 2c Tax Class for the property.

Property owners who miss the January 2nd deadline must reapply with a new enrollment application and registered Stewardship Plan by May 1st. Reapplying allows you to maintain eligibility in the program without losing benefits.

SFIA:

NEW REGISTRATION: OCTOBER 31ST

New applications must submit their Woodland Stewardship Plan and SFIA application by October 31st of the current year to receive payment for the following year.

EXISTING SFIA: JULY 1ST

Landowners currently enrolled in SFIA will receive a form from the Minnesota Department of Revenue every May. They must return the form by July 1st to certify that the enrolled acreage still meets SFIA requirements.

Landowners must return this form by the deadline to receive payment for the current year.

Note: If the Woodland Stewardship Plan is expired, it must be updated by July 1st and submitted for registration to the Department of Natural Resources to receive SFIA payments.

A majority of this information was gathered from https://www.revenue.state.mn.us/sustainable-forest-incentive-act

and

https://www.revenue.state.mn.us/class-2c-managed-forest-land

Have more questions?

2c: Contact your county assessor here.

SFIA: Contact the Department of Revenue, phone: 651-556-6088, e-mail: proptax.sfia@state.mn.us