Property Records Search

Woodland Property Tax: Fast Forest Land Rates & Relief Guide

Woodland Property Tax calculations often hinge on the taxable value of forest acreage, which local assessors determine using forest land appraisal methods and county woodland tax policies. Understanding forest land tax rates helps owners compare regional variations in forest property taxes and spot USDA forest tax incentives that can lower the property tax bill for rural forest land. Many taxpayers rely on timberland property tax relief programs, such as agricultural exemption forest land or property tax deferral for conservation easement, to reduce their annual liability. Accurate knowledge of the woodland tax appeal process and state forest tax codes can prevent unexpected tax liens and improve long‑term tax planning for timberland investment.

Woodland Property Tax concerns also include how to calculate woodland property tax using county-specific formulas and the impact of tax credits for reforestation projects on the overall taxable value. Property tax exemptions for forest owners, like the agricultural exemption forest land, often vary by state woodland tax guidelines and can affect the land valuation of wooded parcels. Owners interested in conservation easement tax benefits should review local tax on forest parcels and the property tax deferral options available through the Yolo County Assessor’s Branch. Staying informed about county woodland tax policies and state forest tax codes ensures smoother property tax assessment for woodland and protects against costly assessment errors.

Search Woodland City Property Tax

Woodland property tax records serve as the main source for parcel data, assessed values, and tax bill status for every property inside city limits. The City of Woodland falls under Yolo County jurisdiction, so the county assessor keeps all official records. Taxpayers find land use codes, acreage, exemption filings, and any active tax liens through public search tools. Owners of timberland, forest parcels, or wooded acreage use the same system to verify the taxable value of forest acreage.

Required Search Details

Gather key facts before starting a parcel lookup. The assessor system accepts parcel numbers, property addresses, or owner names as search criteria. Taxpayers with timberland or forest parcels need the legal description, which often includes section, township, and range data. Rural parcels may require the book and page number from the recorded deed for a complete match.

  • Parcel number (APN)
  • Property street address
  • Owner full name
  • Legal description (section, township, range)
  • Deed book and page number
  • Subdivision or lot number

Search Results Explained

The search results page shows current assessed value, tax year, and payment status for the selected parcel. Forest land and timberland parcels display land use codes that trigger set appraisal methods. Owners see any active exemptions, including agricultural exemption forest land filings. The results list pending appeals, tax liens, and any deferred property tax amounts tied to conservation easements.

  • Assessed land value
  • Tax year and bill amount
  • Payment status (paid, due, delinquent)
  • Land use code and zoning class
  • Active exemption types
  • Pending appeal status
  • Conservation easement filings

Record Types Available

Public records cover assessment rolls, tax bills, exemption claims, and parcel maps. Woodland property tax records include supplemental assessments for new construction or zoning changes. Forest land owners find timber yield data, stocking reports, and harvest history tied to their APN. Recorded deeds, liens, and ownership transfers appear in the recorder branch archive for review.

  • Annual assessment roll
  • Tax bill and payment history
  • Exemption claim forms
  • Parcel and zoning maps
  • Supplemental assessment notices
  • Timber yield and harvest records
  • Recorded deeds and liens

Yolo County Assessor Office Access

The Yolo County Assessor’s Branch handles all Woodland property tax assessment, exemption processing, and parcel data updates. The office sits inside the county government center in downtown Woodland. Taxpayers visit for in-person help, document review, and filing of exemption claims. The branch also answers questions about property tax bills for rural forest land and timberland parcels.

Office Location Details

The assessor branch operates from the Yolo County government building at 625 Court Street, Room 104, Woodland, CA 95695. Visitors check in at the front desk and receive a queue ticket for service. Parking is available in the county lot near the corner of Court and Main streets. The building follows ADA access rules, with ramps and elevators on the main floor.

  • Street address: 625 Court Street, Room 104
  • City: Woodland, CA 95695
  • Building: Yolo County Government Center
  • Parking: County lot, free for visitors
  • Access: ADA ramps and elevators

Phone and Email Contact

Taxpayers call the main line at (530) 666-8135 for general questions about Woodland property tax bills, exemption status, and parcel data. The email address taxinfo@yolocounty.org handles written requests for records, appeals, and exemption forms. Staff respond to emails within three business days. Callers with complex appraisal questions get a callback from a senior appraiser within one week.

  • Main phone: (530) 666-8135
  • Email: taxinfo@yolocounty.org
  • Email response time: 3 business days
  • Senior appraiser callback: within 7 days
  • Voicemail available after hours

Online Parcel Search Portal

The Yolo County parcel search portal provides round-the-clock access to Woodland property tax records from any device. Users can search by parcel number, address, or owner name without creating an account. The portal links to the assessor branch system and the clerk-recorder public search tool. Results print or save as PDF for use in appeals, refinance, or sale paperwork.

https://www.yolocounty.org/government/general-government-departments/assessor-clerk-recorder-elections/assessor-branch/parcel-number-or-recorder-s-reference-search

Step-by-Step Online Search

Open the portal and pick a search method: parcel number, address, or owner name. Type the details into the search box and hit enter. The system returns a list of matching parcels with key data: APN, situs address, acreage, and land use code. Click the parcel number to open the full record with assessed value, tax bill, and exemption status.

  1. Open the Yolo County parcel search portal
  2. Pick a search type: parcel number, address, or owner
  3. Type the search term into the input box
  4. Review the list of matching parcels
  5. Click the APN to open the full record
  6. Print or save the results as a PDF

Portal Features and Tools

The portal includes map view, assessment history, and tax payment links. Users toggle between list view and map view to see parcel boundaries. The tax payment link connects to the county treasurer system for online bill pay. The portal shows the date of the last assessment update and any pending changes to the parcel.

  • Map view with parcel boundaries
  • List view for fast scanning
  • Assessment history (last 5 years)
  • Tax payment link to treasurer
  • Last update date stamp
  • Pending change alerts

Forest Land Tax Rates by County

Forest land tax rates vary across California counties based on zoning, land use, and timber productivity. Yolo County applies set rates to timberland, woodland, and forest parcels under the state Forest Taxation Rules. Rates depend on the parcel’s classification, stocking level, and ability to grow commercial timber. The table below shows common forest land tax rate categories used in California.

Land Use CategoryDescriptionTypical Tax Basis
Timberland Production Zone (TPZ)Parcels zoned for commercial timber growingSite value plus timber value
WoodlandParcels with mixed timber and non-commercial treesSite value only
Forest LandParcels with standing timber ready for harvestTimber value at harvest
Agricultural PreserveParcels under a conservation contractRestricted use value

Rate Calculation Factors

Three main factors shape forest land tax rates in Yolo County. The first factor is land classification, set by the assessor based on the dominant tree species and stand age. The second factor is stocking level, which measures trees per acre and overall forest health. The third factor is the county general tax rate, which combines voter-approved rates from schools, cities, and special districts.

  • Land classification (TPZ, woodland, forest)
  • Stocking level (trees per acre)
  • County general tax rate (1% plus local rates)
  • Special district assessments (fire, water, school)
  • Voter-approved bond rates

Regional Rate Variations

Forest land tax rates differ across Northern California counties based on timber prices, harvest cycles, and local demand. Yolo County rates align with Sacramento Valley averages but run lower than coastal timber counties. Rural forest parcels often pay less per acre than urban parcels because of lower site values. Owners compare regional rates to spot opportunities for tax planning for timberland investment.

  • Yolo County: aligns with Sacramento Valley average
  • Coastal counties: higher rates due to timber prices
  • Rural parcels: lower site values, lower bills
  • Urban parcels: higher site values, higher bills

Timberland Property Tax Relief Options

Timberland property tax relief programs help forest owners reduce annual tax bills and protect working forests. California offers state-level relief through the Timberland Production Zone program and the Forest Improvement Program. Federal relief comes from the USDA forest tax incentives and the IRS Section 631 timber tax election. Woodland property tax relief combines state, federal, and county programs to lower the overall tax burden.

ProgramAdministered ByMain Benefit
Timberland Production Zone (TPZ)California Board of ForestryRestricted use value assessment
Forest Improvement ProgramCalifornia Department of ForestryCost-share for management plans
USDA Forest Tax IncentivesUSDA Forest ServiceCost-share for reforestation
Section 631 ElectionIRSCapital gains treatment for timber

State Relief Programs

The Timberland Production Zone (TPZ) program gives the largest state-level relief for timberland owners. Parcels zoned TPZ pay tax based on the restricted use value, not the full market value. The savings can reach 60% to 80% of the standard property tax bill. Owners must keep the parcel in timber production for at least 10 years to keep the relief.

  • TPZ zoning reduces assessed value
  • Savings range: 60% to 80% of standard bill
  • 10-year commitment to timber production
  • Annual management plan filed with the county
  • Withdrawal from TPZ triggers rollback taxes

Federal USDA Incentives

USDA forest tax incentives support reforestation, forest stand improvement, and sustainable harvest practices. The Forest Service offers cost-share payments through programs like the Environmental Quality Incentives Program (EQIP). The IRS Section 631 election lets owners treat timber sales as capital gains rather than ordinary income. Woodland property tax planning often pairs state TPZ relief with federal Section 631 treatment for the best result.

  • EQIP cost-share for reforestation
  • Section 631 capital gains for timber
  • Reforestation tax credit (10% of cost)
  • Amortization of reforestation costs
  • Conservation easement deduction

Agricultural Exemption Forest Land

The agricultural exemption forest land program treats timber production as a farm activity for property tax purposes. Parcels that grow and harvest commercial timber qualify for the same tax breaks as row crops and orchards. Woodland property tax assessment for qualifying parcels uses the agricultural use value, not the market value. The exemption requires proof of timber sales, stocking levels, and active management.

Eligibility Standards

Parcels must meet three tests for the agricultural exemption. The first test is the size rule: parcels need at least 5 acres of commercial timber. The second test is the income rule: timber sales must show a profit in 3 of the last 5 years. The third test is the management rule: owners file a timber management plan with the county.

  • Minimum 5 acres of commercial timber
  • Timber sales profit in 3 of 5 years
  • Active timber management plan on file
  • Stocking level of 100+ trees per acre
  • Harvest records submitted to the assessor

Application Process

Owners file Form AGR-1 with the Yolo County Assessor to claim the agricultural exemption. The form needs a parcel map, timber management plan, and 3 years of harvest records. The assessor reviews the file and either grants or denies the exemption within 90 days. Approved exemptions stay on the parcel for 5 years before renewal is required.

  1. Pick up Form AGR-1 from the assessor office
  2. Fill out the parcel data and owner details
  3. Attach the timber management plan
  4. Include 3 years of harvest records
  5. Submit the form to the assessor branch
  6. Wait for the approval letter (within 90 days)

Conservation Easement Tax Benefits

A conservation easement restricts how a forest owner can use the land in exchange for tax benefits. The easement stays with the parcel when sold, so the relief continues for future owners. Woodland property tax deferral for conservation easement reduces the taxable value of forest acreage. Federal tax benefits include a charitable deduction for the easement value.

Easement Types Recognized

Three main easement types apply to forest parcels in California. The first is a working forest easement, which keeps the land in timber production but limits development. The second is a habitat easement, which protects endangered species and native plants. The third is a scenic easement, which limits building to keep the view open. Each type offers the same property tax deferral for conservation easement.

  • Working forest easement (timber production)
  • Habitat easement (species and plant protection)
  • Scenic easement (view protection)
  • Open space easement (public access)
  • Watershed easement (water quality)

Tax Deferral Rules

The property tax deferral for conservation easement program lowers the assessed value of the parcel by the value of the restrictions. Yolo County assessors use the difference between the unrestricted value and the restricted value to set the new tax base. The deferral stays in place as long as the easement stays in place. If the owner breaks the easement terms, the deferred taxes come due with interest.

  • New tax base = restricted use value
  • Deferral lasts for the life of the easement
  • Break of terms triggers back taxes plus interest
  • Easement value set by a licensed appraiser
  • Annual report to the assessor required

Woodland Tax Appeal Process

The woodland tax appeal process gives property owners a way to challenge the assessed value of their parcel. Owners file an appeal when the assessed value is too high, the land use code is wrong, or an exemption was missed. Woodland property tax appeals go to the Yolo County Assessment Appeals Board for review. The board holds a hearing and issues a decision within 2 years of filing.

Grounds for Appeal

Four common grounds support a woodland tax appeal. The first is overvaluation: the assessed value is higher than the market value. The second is misclassification: the land use code does not match the actual use. The third is exemption denial: the assessor denied a valid exemption claim. The fourth is change in value: the parcel suffered damage or a zoning change that lowered the value.

  • Overvaluation (assessed value too high)
  • Misclassification (wrong land use code)
  • Exemption denial (valid claim rejected)
  • Change in value (damage or zoning change)
  • Equalization issue (value higher than neighbors)

Filing Steps and Deadlines

Owners file an Assessment Appeal Application with the Yolo County Clerk of the Board. The filing period runs from July 2 to November 30 for the next tax year’s bill. A filing fee applies for each parcel under appeal. Owners submit supporting evidence, like appraisals, comparable sales, and harvest records, at least 30 days before the hearing.

  1. Pick up the Assessment Appeal Application form
  2. Fill out parcel data and appeal grounds
  3. Pay the filing fee per parcel
  4. Submit the form to the Clerk of the Board
  5. Serve a copy on the assessor branch
  6. Exchange evidence 30 days before hearing

Forest Land Appraisal Methods

Forest land appraisal methods set the taxable value of wooded parcels for property tax purposes. Three standard methods apply: the income approach, the market approach, and the cost approach. Woodland property tax assessment picks the method that best fits the parcel’s timber value, land use, and stand condition. The assessor uses a combination of methods for large or mixed-use forest parcels.

MethodBasis of ValueBest For
Income ApproachNet timber income over a rotationProductive timberland
Market ApproachRecent sales of similar parcelsSuburban forest parcels
Cost ApproachLand value plus improvement costsParcels with buildings or roads

Income Approach Details

The income approach values a forest parcel based on the net income it generates from timber sales. The assessor projects timber growth, harvest yield, and stumpage prices over one full rotation. Annual costs for management, taxes, and road upkeep get subtracted from the gross income. The result gets discounted back to a present value to set the assessed value.

  • Project timber growth over a rotation
  • Estimate harvest yield and stumpage price
  • Subtract annual management and tax costs
  • Discount net income to present value
  • Use the present value as the assessed value

Market Approach Details

The market approach values a forest parcel based on recent sales of similar wooded parcels. The assessor pulls comparable sales from the county database and adjusts for size, species, and location. Forest parcels near urban areas sell for more than remote parcels because of development potential. The market approach works best for small forest parcels in suburban areas.

  • Pull comparable sales from county records
  • Adjust for size, species, and location
  • Apply the adjusted price per acre
  • Use the result for the assessed value
  • Best for suburban forest parcels

Tax Credits for Reforestation Projects

Tax credits for reforestation projects cut the cost of planting, tending, and managing new tree stands. Woodland property tax bills can drop when owners reinvest in forest health and timber productivity. The federal reforestation tax credit equals 10% of the first $10,000 in reforestation expenses. State and county programs add cost-share payments for tree planting and stand improvement.

Available Credit Programs

Four main programs support reforestation on private forest land. The first is the federal reforestation tax credit under IRC Section 194. The second is the amortization of reforestation expenses over 8 years. The third is the USDA Environmental Quality Incentives Program (EQIP). The fourth is the California Forest Improvement Program (CFIP) for cost-share on tree planting.

  • Federal reforestation tax credit (10% of costs)
  • Amortization of reforestation costs (8 years)
  • USDA EQIP cost-share payments
  • California Forest Improvement Program
  • State timber tax credits for site prep

Qualification Criteria

Parcels must meet reforestation standards to claim the credit. The site prep must include clearing, burning, or scarification to ready the soil. The planting must use approved tree species suited to the local climate. The owner must keep the stand for at least 5 years after planting. Records of expenses, species, and planting dates get submitted with the tax return.

  • Site prep: clearing, burning, or scarification
  • Approved tree species for local climate
  • Minimum 5-year stand retention
  • Expense records kept for IRS review
  • Planting dates documented in the plan

Property Tax Exemptions for Forest Owners

Property tax exemptions for forest owners cut the annual tax bill for qualifying parcels. Woodland property tax exemptions include timberland, agricultural, and conservation programs. Each exemption has its own rules, filing deadlines, and renewal terms. Forest owners stack exemptions to lower the overall tax burden on wooded parcels.

Standard Homeowner Exemptions

Three standard exemptions apply to all California property owners, including forest owners. The first is the Homeowners’ Exemption, which cuts the assessed value by $7,000 for a primary residence. The second is the Disabled Veterans’ Exemption, which cuts up to $150,000 off the assessed value for qualified veterans. The third is the Church Exemption, which removes tax on parcels used for worship. Forest owners with a home on the parcel can claim the Homeowners’ Exemption in addition to forest exemptions.

  • Homeowners’ Exemption: $7,000 off assessed value
  • Disabled Veterans’ Exemption: up to $150,000 off
  • Church Exemption: full tax removal for worship sites
  • Welfare Exemption: full tax removal for nonprofits
  • Possessory Interest: tax on leased public land

Woodland-Specific Exemptions

Woodland-specific exemptions target forest land and timber production. The Timberland Production Zone (TPZ) exemption cuts the assessed value to restricted use value. The Williamson Act exemption applies to parcels under a 10-year conservation contract. The Forest Legacy Program removes tax on parcels that stay as working forests forever. Each exemption needs a separate application filed with the assessor.

  • TPZ exemption: restricted use value
  • Williamson Act: 10-year contract terms
  • Forest Legacy: permanent working forest
  • Agricultural Preserve: county-set terms
  • Open Space: public access requirement

State Forest Tax Codes and Guidelines

State forest tax codes and guidelines set the rules for timberland taxation across California. The State Board of Forestry writes the Forest Practice Rules and the timberland assessment rules. Yolo County follows the state rules for Timberland Production Zones, the Williamson Act, and the Forest Improvement Program. Woodland property tax bills for timberland reflect the state valuation rules and county general tax rate.

California Timber Tax Rules

California timber tax rules require owners to file a Timber Harvesting Plan (THP) before cutting timber. The THP outlines the harvest area, volume, and reforestation plan. The state Department of Forestry reviews the THP and either approves or denies it. Approved THPs get a yield tax based on the volume of timber cut, paid at harvest time.

  • File a Timber Harvesting Plan (THP)
  • Outline harvest area and volume
  • Submit reforestation plan with the THP
  • Pay yield tax on timber volume at harvest
  • Submit post-harvest report to the state

County Implementation

Yolo County implements the state rules through the assessor and the planning department. The assessor applies the restricted use value for TPZ parcels. The planning department checks that timber harvests match the THP and local zoning. Woodland property tax bills for timberland show the TPZ savings and the yield tax paid at harvest. County staff answer questions about compliance, exemptions, and appeals.

  • Assessor applies restricted use value for TPZ
  • Planning checks THP and zoning match
  • Tax bills show TPZ savings and yield tax
  • Staff answer compliance and appeal questions
  • Annual reports filed with the state

Tax Planning for Timberland Investment

Tax planning for timberland investment helps owners manage the tax cost of buying, holding, and selling forest parcels. Woodland property tax planning combines exemptions, deferrals, and harvest timing. A good plan lowers the lifetime tax bill and protects the parcel from rollback taxes. Owners work with foresters, appraisers, and tax pros to build the plan.

Harvest Timing Strategies

Harvest timing shapes the tax bill for timberland owners. Selling timber in a high-price year raises income, so owners time harvests to spread income over low-tax years. Owners also plan harvests to avoid triggering TPZ withdrawal penalties. The best harvest time balances timber growth, market prices, and tax bracket management.

  • Sell timber in high-price years
  • Spread harvest income over low-tax years
  • Avoid TPZ withdrawal penalties
  • Balance growth, price, and tax bracket
  • Plan harvests around the rotation cycle

Cost Basis Tracking

Cost basis tracking records the original purchase price, plus improvements, minus depreciation. A higher cost basis lowers the capital gain when the parcel sells. Owners keep records of purchase price, closing costs, timber stand improvements, and management fees. Woodland property tax planning uses the cost basis to estimate the future tax bill on a timberland sale.

  • Track purchase price and closing costs
  • Add timber stand improvements
  • Subtract depreciation taken on improvements
  • Keep management fees in the records
  • Use cost basis to estimate sale tax

Calculate Woodland Property Tax

Calculate woodland property tax using the assessed value times the combined tax rate. The assessed value comes from the forest land appraisal methods described above. The combined tax rate includes the 1% county general rate, plus local rates for schools, fire, water, and bonds. Woodland property tax bills for forest parcels often show a lower rate than urban parcels because of timber exemptions.

Base Value Calculation

Base value calculation starts with the restricted use value for TPZ parcels, or the market value for non-TPZ parcels. The assessor applies any active exemptions, like the Homeowners’ Exemption, to lower the base value. The result is the taxable value of forest acreage, which the assessor reports on the annual tax bill. Owners check the taxable value each year for errors or missed exemptions.

  • Start with restricted or market value
  • Apply active exemptions to lower value
  • Result is the taxable value
  • Assessor reports value on the tax bill
  • Check the value each year for errors

Tax Rate Application

Tax rate application multiplies the taxable value by the combined local rate. The 1% county general rate is fixed by California law. Local rates for schools, fire, water, and bonds vary by parcel and district. The total rate appears on the annual tax bill as a percentage of the taxable value. Woodland property tax payments go to the Yolo County Tax Collector.

  • Taxable value × 1% county general rate
  • Add local school, fire, water rates
  • Add voter-approved bond rates
  • Total rate appears on the tax bill
  • Pay the bill to the Yolo County Tax Collector

Contact, Local Details, and Map

The Yolo County Assessor’s Branch and Clerk-Recorder’s Branch handle all Woodland property tax records, appeals, and document requests. The offices sit in the same government building in downtown Woodland. Taxpayers can call, email, or visit for help with parcel searches, exemption claims, and tax bill questions. The mailing address matches the physical address for both branches.

Assessor Branch Contact

Department: Yolo County Assessor’s Branch
Official Website: https://www.yolocounty.org
Direct Public Search Portal: https://www.yolocounty.org/government/general-government-departments/assessor-clerk-recorder-elections/assessor-branch/parcel-number-or-recorder-s-reference-search
Main Phone: (530) 666-8135
Official Email: taxinfo@yolocounty.org
Physical Address: 625 Court Street, Room 104, Woodland, CA 95695
Mailing Address: 625 Court Street, Room 104, Woodland, CA 95695

Clerk-Recorder Branch Contact

Department: Yolo County Clerk-Recorder’s Branch
Official Website: https://www.yolocounty.org
Direct Public Search Portal: https://yolocounty.ca.publicsearch.us
Main Phone: (530) 666-8135
Official Email: taxinfo@yolocounty.org
Physical Address: 625 Court Street, Room 102, Woodland, CA 95695
Mailing Address: 625 Court Street, Room 102, Woodland, CA 95695

Frequently Asked Questions

Woodland Property Tax helps owners understand what they owe, where savings may exist, and how to keep their forest land in good standing. The Yolo County Assessor’s Office supplies data on assessed value, exemptions, and payment options. Knowing the rules can lower costs, avoid penalties, and protect future investments in timberland.

What is the current woodland property tax rate in Yolo County?

Yolo County applies a base rate of 1.1% on the taxable value of forest parcels. The taxable value equals the market value minus any eligible exemptions such as agricultural or conservation easement credits. For example, a 50‑acre timberland assessed at $500,000 would generate a tax bill of about $5,500 before exemptions. Check the County’s online assessor portal for exact figures each fiscal year.

How can I claim a timberland property tax relief or exemption?

Start by gathering proof of active timber production or a signed conservation easement. Submit the exemption form through the Yolo County Assessor’s website before the March 31 deadline. Include a recent timber harvest schedule or easement deed. Once approved, the assessor reduces the taxable value, often cutting the bill by 15‑30 percent. Follow up with a phone call to confirm receipt.

What steps are involved in appealing a woodland tax assessment?

First, request a copy of the assessment notice. Compare the recorded acreage and land use code with your own survey. If differences appear, prepare a written appeal and attach a recent independent appraisal. File the appeal online or deliver it to 625 Court Street, Room 104, before the 30‑day deadline. The assessor’s board reviews the case and may adjust the valuation.

Do forest owners receive tax credits for reforestation projects?

Yes. The state offers a credit of up to $200 per acre for planting native trees on previously cleared land. Apply through the California Department of Forestry and submit planting receipts and a site map. After verification, the credit reduces your taxable value, lowering the annual bill. Keep records for at least three years in case of audit.

How is the taxable value of a wooded parcel calculated?

The assessor starts with the market value based on recent sales of similar forest land. Next, they subtract any agricultural or conservation exemptions. Finally, they apply the county’s uniform rate. For instance, a 30‑acre parcel valued at $300,000 with a $50,000 agricultural exemption results in a taxable value of $250,000, which the 1.1% rate turns into a $2,750 tax bill.