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Background
Petitioner is an Oregon corporation with its principal
office in Portland, Oregon. Petitioner operates a vertically
integrated forest products manufacturing business, which includes
the ownership and processing of trees (raw materials) at various
types of manufacturing plants, including lumber mills, plywood
plants, and paper mills. The raw materials used in the
manufacturing process are derived from petitioner’s trees and
from trees grown by others. Approximately 40 percent of
petitioner’s timber needs is acquired from petitioner’s
timberland, which comprises 1,253,000 acres of forested land.
Petitioner suffered damage to some of its standing trees
during each of the years in issue, 1992-95. The damage was
caused by wind, ice storms, wildfires, or insect infestations.
The damage left part of petitioner’s damaged trees standing and
part of them fallen. The intended use of the trees was continued
growth and cultivation until maturity, at which time the trees
would have been systematically and efficiently harvested. The
damage occurred prior to the intended time for harvest.
Petitioner salvaged its damaged trees to avoid further loss
(from decay, insects, etc.) by means of the following steps:
(1) Taking down damaged trees that remained standing; (2) cutting
damaged trees into standard length logs; (3) stripping the
branches from the logs; (4) dragging the logs to a pickup point;
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Last modified: May 25, 2011