MN TAX INCENTIVE PROGRAMS

MN Woodland Stewardship Plans help you qualify for 2c Managed Forestland or Sustainable Forest Incentive Act (SFIA) as well as other programs available in Minnesota. Currently there are two major programs available for landowners that are the most common. Class 2C Managed Forestland or Sustainable Forest Invective Act (SFIA).

2c Managed Forest vs SFIA

Wooded property that qualifies as 2c Managed Forestland benefits from a 35% tax reduction. Private landowners will receive a special classification rate of 0.65 percent on eligible land.

Lands enrolled into SFIA is ideal for large acreage property with lower taxes. The three enrollment periods to choose from are; 8, 20, and 50 years. The longer the enrollment period, the higher their per-acre payment will be.

What is a covenant?

Landowners enrolled in the SFIA must sign a document called a covenant. The covenant states a landowner is following the program's qualifications and will continue to do so for the specified enrollment period.

While the 2c Tax Class is calculated by the property's value, the SFIA payment amounts are based on the duration of the covenant. 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.

*NOTE: New MN Tax Law has changed the SFIA payments for 2027 moving forward. Payments can now adjust more than 10% downward. Given this new regulation, landowners now have the option to opt out of SFIA beginning in spring of 2027 with an application of withdrawal.

2C and SFIA Requirements

2c Managed Forestland Requirements:

  • 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 Requirements:

  • 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.

Have a building or cabin on the property?

2c Managed Forestland:

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. Example: A shed housing land management equipment would count, a shed housing recreational vehicles would not.

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.

I advise 3 acres minimum to upwards of 5 acres if building or plans to build additional buildings is in the works or down the road.

How to enroll

2c Managed Forestland:

The county assessor's will have an application that you can download off your county’s website. Submit your completed form to the county assessor's office by the date required to enroll (May 1st) in the county where the property is located.

Counties may have multiple assessors for each township, so make sure to connect with the correct assessor for your specific township.

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:

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. Once processed, landowners receive a Covenant Recording Number for their SFIA enrollment application.

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

Important Deadlines

2c Tax Class:

NEW REGISTRATION: MAY 1ST

New applicants must submit application to the appropriate county by May 1st to qualify for the current assessment year, with taxes payable the following year.

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 allow assessors to maintain the 2c Tax Class for the property.

If you miss the January 2nd deadline, you 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 Landowners: 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.

More Information can be found at the MN Department of Revenue website https://www.revenue.state.mn.us/sustainable-forest-incentive-act

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

*NOTE: New MN Tax Law has changed the SFIA payments for 2027 moving forward. Payments can now adjust more than 10% downward. Given this new regulation, landowners now have the option to opt out of SFIA beginning in spring of 2027 with an application of withdrawal

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