Logging Case Analysis

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The decision has implications that are both very broad, and very narrow.

The legal rules enunciated are arguably broad, because they apply not just to the exemption for logging equipment, but to all exemptions in sec. 70.111. For any taxpayer to obtain any similar exemption, it must show that the primary purpose of its business is one that the legislature intended to benefit.

However, on the particular logging equipment exception at issue, the holding leaves open grounds for being distinguished.

The dissent in this case concluded that Wood-Land presented sufficient evidence on the motion for summary judgment to create a factual question for the jury whether logging was part of its primary business.

The majority dismissed this in a footnote as follows: "The dissent contends that we should remand so that Wood-Land can have the opportunity to put into evidence that it is, in fact, in the logging business. But Wood-Land had the statute in its hands when it applied for summary judgment. It agreed that all of the facts were undisputed. In its brief-in-chief, it did not ask for a trial, but asked for a decision favoring it as a matter of law. We are convinced that had Wood-Land in fact claimed that it was in the logging business, it would have made that claim in the trial court and asked for a trial to prove it."

Regardless of what Wood-Land did in fact argue on the motion for summary judgment, the majority opinion can be construed as merely holding that simply owning logging equipment, cutting trees, and selling the products, is insufficient to qualify for the exemption.

The legal question having been decided to the contrary, future parties in situations identical to Wood-Land can still arguably qualify for the exemption with a different legal strategy.

Further support for this argument is to be found in the court’s dismissive statement discussing the definition of "forest product":

"We surmise that most Wisconsinites … would … not think of a tree standing in front of a residential lawn as a potential ‘forest product.’"

While this statement is certainly applicable to the average suburban lawn and tree care service, it is not remotely applicable to Wood-Land’s actual business.

Thus, the decision arguably should not be construed as holding that businesses like Wood-Land are per se not in the logging business, but only as holding that merely cutting down trees and selling the wood is insufficient to qualify for the exemption.

With a different legal strategy, businesses in the identical position of Wood-Land could still qualify for the exemption, this decision notwithstanding.

Vagaries of geography could also change the result in similar cases. This case arose in Waukesha County, an area not generally considered "forest."

	Links Wisconsin Court of Appeals Related Article Tax exemption only applies to traditional logging

If a business performed identical services, and produced identical products, but further north, in a more heavily wooded area, it could distinguish this case on that ground. Such a business could attempt to argue that Wood-Land merely clears random trees from farmland being converted into residential subdivisions, while it, on the other hand, clears actual forest.

However, such arguments will run into difficulty because of other portions of the decision that did directly address Wood-Land’s operations, as opposed to the statute generally.

The court stated, "[Wood-Land’s] business is to clear land for the purpose of giving developers what they want: land free from obstructions. That is what it gets paid for. While Wood-Land may incidentally fell trees as part of its business, it does not cut and transport fro
m logging areas."

– David Ziemer

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David Ziemer can be reached by email.