WSR 03-09-100

PREPROPOSAL STATEMENT OF INQUIRY

DEPARTMENT OF REVENUE


[ Filed April 21, 2003, 11:44 a.m. ]

Subject of Possible Rule Making: WAC 458-40-680 Timber excise tax -- Volume harvested -- Approved scaling and grading methods -- Sample scaling -- Conversions.

Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 84.33.096 and 82.32.300.

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: WAC 458-40-680 explains how to determine timber volume harvested for the stumpage value tables. The rule provides several alternative methods for determining the harvested timber volume when Scribner Decimal C method is not used. In practice, harvesters sometimes rely upon a purchaser's approved sample scaling method. We anticipate clarifying in the rule whether the harvester may rely upon a purchaser's approved sample scaling method. The current rule does not provide explicit instructions to a harvester that uses a sample scaling method that is not approved. We anticipate clarifying how volume is determined when a sample scaling method is used that has not been approved by the department. The rule also has weight conversion tables intended for purchases of timber by weight. In recent years, these purchases by weight have been exclusively small logs. The last revision of the rule contained conversion factors intended only for small logs. We anticipate discussion about this change and what clarifications are needed to apply the weight conversion provision correctly.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: No other federal or state agency regulates Washington state's excise taxes upon timber.

Process for Developing New Rule: Modified negotiated rule making.

Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. Written comments may be submitted by mail, e-mail, fax, or at the public meeting. Oral comments will be accepted at the public meeting. A preliminary discussion draft of a possible new or revised rule(s) is available upon request. Written comments on and/or requests for copies of the draft may be directed to Ed Ratcliffe, Legislation and Policy, P.O. Box 47467, Olympia, WA 98504-7467, phone (360) 570-6126, e-mail EdR@dor.wa.gov, fax (360) 664-0693.

Date and Location of Public Meeting: Department of Revenue Conference Room, Target Place Building No. 4, 2735 Harrison Avenue N.W., Olympia, WA, on May 15, 2003, at 10 a.m.

Assistance for Persons with Disabilities: Contact Sandy Davis no later than ten days before the hearing date, TTY 1-800-451-7985 or (360) 570-6175.

April 21, 2003

Alan R. Lynn

Rules Coordinator

Legislation and Policy Division

THIS DRAFT IS NOT TO BE CONSIDERED A PROPOSED RULE AND IS ONLY PROVIDED FOR DISCUSSION PURPOSES TO DETERMINE WHAT AMENDMENTS A LATER PROPOSED RULE MIGHT ADDRESS. UNDER NO CIRCUMSTANCES IS THIS DISCUSSION DRAFT TO BE USED TO DETERINE TAX LIABILITY AND OR EXEMPTIONS.

Reviser's note: The spelling error in the above material occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
AMENDATORY SECTION(Amending WSR 00-24-068, filed 12/1/00, effective 1/1/01)

WAC 458-40-680   Timber excise tax -- Volume harvested -- Approved scaling and grading methods -- Sample scaling -- Conversions.   (1) Introduction. The acceptable log scaling and grading standard for stumpage value areas 1, 2, 3, 4, 5, and 10 is the Scribner Decimal C log rule as described in the most current edition of the "Official Log Scaling and Grading Rules" developed and authored by the Northwest Log Rules Advisory Group. The acceptable log scaling standard for stumpage value areas 6 and 7 is the Scribner Decimal C log rule described in the most current edition of the "National Forest Log Scaling Handbook" (FSH 2409.11) as published by the United States Forest Service. Lodgepole pine harvested in stumpage value areas 6, 7, or 10 must be scaled using a one inch taper allowance per log segment.

(2) Special services scaling. Special services scaling as described in the "Official Log Scaling and Grading Rules" developed and authored by the Northwest Log Rules Advisory Group may not be used for tax reporting purposes without prior written approval of the department of revenue.

(3) Sample scaling. Sample scaling may not be used for tax reporting purposes without prior written approval of the department of revenue. To be approved, sample scaling must be in accordance with the following guidelines:

(a) Sample selection, scaling, and grading must be conducted on a continuous basis as the unit is harvested.

(b) The sample must be taken in such a manner to assure random, unbiased sample selection in accordance with accepted statistical tests of sampling.

(c) The sample used to determine total volume, species, and quality of timber harvested for a given reporting period must have been taken during that period.

(d) Sample frequency must be large enough to meet board foot variation accuracy limits of plus or minus two and five-tenths percent standard error at the ninety-five percent confidence level.

(e) Harvesters, or a purchaser with an approved sample scaling method, must maintain sufficient supporting documentation to allow the department of revenue to verify source data, and test statistical reliability of sample scale systems.

(f) Exceptions: Sampling designs and accuracy standards other than those described herein may only be used with the prior written approval of the department of revenue.

(4) Conversions to Scribner Decimal C Scale. The following definitions, tables, and conversion factors must be used in determining taxable volume for timber harvested that was not originally scaled by the Scribner Decimal C Log Rule. Conversion methods other than those listed are not to be used for tax reporting purposes without prior written approval of the department of revenue. Harvesters, or purchasers, who wish to use a method of conversion other than those listed below must obtain written approval from the department of revenue before harvesting. If the harvester, or purchaser, fails to use an approved sample scaling method or other method of conversion approved by these rules to set the purchase price, the Department will establish its own method, as the circumstances require, to determine a reasonable estimate of the volume of timber sold.

(a) Weight measurement. If the ((original)) unit of measure used to set the purchase price was ((by)) weight, and the harvester, or the purchaser, ((has not applied for approval)) does not use an approved method of sample scaling to determine volume for the stumpage value tables, the following tables must be used for converting to Scribner Decimal C. Harvesters must keep records to substantiate the species and quality codes reported. For tax reporting purposes, a ton equals 2,000 pounds.

(Stumpage Value Areas 1, 2, 3, 4, 5, & 10)

BOARD FOOT WEIGHT SCALE FACTORS

(TONS/MBF)

Species Quality Code
1 2 3 4
Douglas-fir1 5.0 6.0 6.50 7.50
Western Hemlock2 6.0 6.5 7.50 8.25
Western Redcedar3 7.0
Red Alder4 7.0 7.8
Chipwood 9.0

1 Includes Douglas-fir, Western Larch, and Sitka Spruce.
2 Includes Western Hemlock, Mountain Hemlock, Pacific Silver Fir, Noble Fir, Grand Fir, Subalpine Fir, and other conifers not separately designated. Pacific Silver Fir, Noble Fir, Grand Fir, and Subalpine Fir are all commonly referred to as "White Fir."
3 Includes Alaska-cedar.
4 Maple, Black Cottonwood and other hardwoods.

(Stumpage Value Areas 6 & 7)

BOARD FOOT WEIGHT SCALE FACTORS

(TONS/MBF)

Quality code
Species 1 2
Ponderosa Pine 5.0 6.50
Douglas-fir1 5.50
Lodgepole Pine 6.0
Western Hemlock2 5.50
Englemann Spruce 4.50
Western Redcedar3 4.50
Chipwood 9.0
Small Logs 6.50

1 Includes Western Larch.
2 Includes Western Hemlock, Mountain Hemlock, Pacific Silver Fir, Noble Fir, Grand Fir, Subalpine Fir, and other conifers not separately designated. Pacific Silver Fir, Noble Fir, Grand Fir, and Subalpine Fir are all commonly referred to as "White Fir."
3 Includes Alaska-cedar.
(b) Cord measurement. For the purposes of converting cords into Scribner volume:

(i) In stumpage value areas 1, 2, 3, 4, 5, and 10 logs with an average scaling diameter of 8 inches and larger must be converted to Scribner volume using 400 board feet per cord. Logs having an average scaling diameter of less than 8 inches must be converted to Scribner volume using 330 board feet per cord.

(ii) In stumpage value areas 6 and 7 logs with an average scaling diameter of 8 inches and larger must be converted to Scribner volume using 470 board feet per cord. Logs having an average scaling diameter of less than 8 inches must be converted to Scribner volume using 390 board feet per cord.

(iii) A cord of Western Redcedar shake or shingle blocks must be converted to Scribner volume using 600 board feet per cord.

(c) Cants or lumber from portable mills. To convert from lumber tally to Scribner volume:

(i) In stumpage value areas 1, 2, 3, 4, 5, and 10 multiply the lumber tally for the individual species by 75%, and round to the nearest one thousand board feet (MBF); or

(ii) In stumpage value areas 6 and 7 multiply the lumber tally for the individual species by 88%, and round to the nearest one thousand board feet (MBF).

(d) Log scale conversion. Timber harvested in stumpage value areas 1, 2, 3, 4, 5, and 10 and which has been scaled by methods and procedures published in the "National Forest Log Scaling Handbook" (FSH 2409.11) must have the volumes reported reduced by eighteen percent. Timber harvested in stumpage value areas 6 and 7 and which has been scaled by methods and procedures published in the "Official Log Scaling and Grading Rules" developed and authored by the Northwest log rules advisory group, must have the volumes reported increased by eighteen percent.

(e) Timber pole and piling volume tables. Harvesters of poles must use the following tables to determine the Scribner board foot volume for each pole length and class:

Total Scribner Board Foot Volume

Stumpage Value Areas 1, 2, 3, 4, 5, and 10

Pole Class1 Piling Class2
Length H6 H5 H4 H3 H2 H1 1 2 3 4 5 6 7 9 10 A B
20 50 50 40 40 30 30 20 20 20 80 70
25 60 60 50 50 40 40 30 30 30 100 90
30 110 70 60 60 50 50 40 40 130 110
35 160 160 130 100 80 80 60 60 50 130 110
40 240 200 180 180 150 120 120 90 70 60 150 120
45 380 340 340 280 230 230 190 150 120 120 90 90 150 120
50 430 370 370 300 260 260 210 160 140 140 100 160 140
55 470 410 410 330 280 280 230 180 150 150 180 150
60 540 470 470 410 340 340 290 220 190 190 190 160
65 610 520 520 420 380 380 320 260 210 210 210 180
70 650 560 560 480 400 400 350 270 230 230 230 190
75 700 600 600 520 520 520 440 290 250 230 200
80 820 700 700 600 600 540 440 360 290 250 210
85 910 800 800 660 660 660 570 490 360 260 210
90 1080 930 930 820 820 690 590 490 400 260 220
95 1170 1000 1000 870 870 750 640 540 290 240
100 1190 1030 1030 900 900 760 660 550 310 250
105 1310 1160 1160 1000 1000 860 740 610 330 270
110 1370 1220 1220 1050 1050 910 780 650 380 300
115 1440 1280 1280 1100 1100 960 860 680 400 310
120 1660 1460 1460 1300 1300 1140 970 820 500 400
125 1840 1600 1600 1410 1410 1250 1080 930
130 1920 1680 1680 1490 1490 1310 1120 970

1 Pole class definitions taken from American National Standard specifications and dimensions for wood poles as approved August 7, 1976, under American National Standard Institute, Inc. codified ANSI 05.1-1972.
2 Piling class definitions as per American Society for Testing and Materials for "round timber piles." As the designation: D 25-58 (reapproved 1964).

Total Scribner Board Foot Volume

Stumpage Value Areas 6 and 7

Pole Class1 Piling Class2
Length H6 H5 H4 H3 H2 H1 1 2 3 4 5 6 7 9 10 A B
20 70 60 50 50 30 30 20 20 20 90 70
25 80 70 50 50 40 40 30 30 20 100 80
30 110 90 60 60 50 50 50 40 130 110
35 190 160 140 100 100 70 60 60 50 140 100
40 240 240 200 170 120 110 100 70 70 140 100
45 390 330 330 270 270 220 180 150 110 110 80 70 150 110
50 460 390 390 340 340 280 240 190 150 150 120 190 150
55 510 430 430 370 360 300 250 190 150 150 190 150
60 610 530 530 440 440 380 310 240 200 200 240 200
65 650 570 570 490 480 410 350 280 220 220 240 200
70 750 650 650 550 470 470 410 320 260 260 260 210
75 810 700 700 600 600 500 440 340 270 270 220
80 960 830 830 710 710 610 510 420 340 220 220
85 1020 870 870 760 760 640 550 450 360 300 240
90 1110 970 970 840 840 720 620 500 420 280 280
95 1160 1010 1010 870 870 740 640 510 360 280
100 1380 1210 1210 1060 1060 910 780 650 360 280
105 1430 1250 1250 1100 1100 940 820 690 400 300
110 1580 1390 1390 1220 1220 1070 920 770 460 340
115 1660 1470 1470 1280 1280 970 810 680 470 360
120 1880 1680 1680 1480 1480 1290 1130 950 560 450
125 1910 1690 1690 1490 1490 1140 970 810
130 2170 1920 1920 1710 1710 1510 1320 1140

1 Pole class definitions taken from American National Standard specifications and dimensions for wood poles as approved August 7, 1976, under American National Standard Institute, Inc. codified ANSI 05.1-1972.
2 Piling class definitions as per American Society for Testing and Materials for "round timber piles." As the designation: D 25-58 (reapproved 1964).

[Statutory Authority: RCW 82.32.300 and 84.33.096. 00-24-068, 458-40-680, filed 12/1/00, effective 1/1/01. Statutory Authority: RCW 82.32.330, 84.33.096 and 84.33.120. 96-02-056, 458-40-680, filed 12/29/95, effective 1/29/96. Statutory Authority: RCW 82.32.300 and 84.33.096. 95-14-084, 458-40-680, filed 6/30/95, effective 7/31/95. Statutory Authority: Chapter 84.33 RCW. 87-02-023 (Order 86-4), 458-40-680, filed 12/31/86.]

Reviser's note: RCW 34.05.395 requires the use of underlining and deletion marks to indicate amendments to existing rules. The rule published above varies from its predecessor in certain respects not indicated by the use of these markings.

Legislature Code Reviser 

Register

Washington State Code Reviser's Office