Lawmaker wants to give Pennsylvania's loggers a break
Miles into the forest, logger Patrick Donovan sits atop a $200,000 log truck as he deftly picks up pieces of poplar with a metal grabber that resembles an oversized arcade machine claw.
The truck, which often buses 21 tons of logs to sawmills, is too costly to replace, despite its years of use, Donovan said.
But a state legislator is trying to ease some of the costs for Pennsylvania's 800 loggers, who produce more hardwood lumber, such as oak and maple, than any other state in the nation.
Rep. Matt Gabler wants to exempt timber harvesters from paying sales tax on their costly equipment purchases.
The move would give the logging industry the same tax break as sawmills and some other agricultural businesses, such as farms, that are not required to pay sales tax when buying equipment.
Experts say Gabler's bill will not only save money for loggers, but also for everyday consumers of wood products, such as lumber for home building and furniture.
Donovan, a 34-year veteran of the industry and a member of the Pennsylvania Forest Products Association, wholeheartedly supports the proposal “to help us save money so we can purchase equipment” and “so it's more feasible for the small businesses and the logging industry to stay profitable.”
The House Finance Committee unanimously approved Gabler's bill in June, and he's now waiting to see whether it will appear on the House floor for a vote.
The DuBois Republican's legislation would exempt from sales tax anything purchased for direct use in producing timber, he said.
He added that because consumers pay sales tax when they purchase lumber, charging sales tax to loggers is “essentially double taxing.”
Donovan operates Patrick Donovan Logging, a two-man operation headquartered in Ligonier Township. He said he hasn't purchased new equipment since 1995 because it costs too much.
For him, the legislation could mean he could buy new or used equipment for his operation.
With costs at $170,000 for a bulldozer and as much as $200,000 for other equipment, sales tax alone could climb to about $12,000, said Jamie Menoher, arborist with Patrick Donovan Logging.
The sales tax exclusions would cover a variety of equipment used in logging, such as chainsaws and safety equipment, said Paul Lyskava, executive director of the Pennsylvania Forest Products Association, which supports the bill.
“It's going to benefit the state's logging community, which is primarily made up of small business entrepreneurs. ... A lot of loggers would like to and probably need to update their equipment, and this would go a long way toward providing them some financial assistance to doing so,” Lyskava said.
Gabler proposed the bill after a logging company questioned why sales tax exclusions are extended to farmers but not loggers.
Gabler said the existing law dictating who pays sales tax is somewhat arbitrary.
“The folks that harvest the trees out of the woods do not enjoy a sales tax exclusion, but once those trees are taken to the sawmill ... a sales tax exclusion is applied,” Gabler said. “There's no real reason why that would be different.”
To Gabler, trees are a crop, just like the corn crops that farmers harvest.
The current law can induce accounting headaches, Gabler said, pointing out that a sawmill might also do timbering work using the same equipment.
Gabler estimates his bill's annual impact on the state coffers would be a reduction of about $500,000 in tax revenue, a “pretty small amount” considering the overall budget, he said.
“When you think about who it's going to benefit, it's small family-owned job creators. A little bit of money to them goes a long way to continue to operate in small towns,” Gabler said. “And to make sure that our products produced in Pennsylvania are competitive to those produced in neighboring states.”
Rossilynne Skena is a staff writer for Trib Total Media. She can be reached at 724-836-6646 or firstname.lastname@example.org.