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INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Rayonier is a REIT under the Internal Revenue Code and therefore generally does not pay U.S. federal or state income tax. As of December 31, 2022, Rayonier owns a 97.9% interest in the Operating Partnership and conducts substantially all of its timberland operations through the Operating Partnership. The taxable income or loss generated by the Operating Partnership is passed through and reported to its unitholders (including the Company) on a Schedule K-1 for inclusion in each unitholder’s income tax return. Certain operations, including log trading and certain real estate activities, such as the entitlement, development and sale of HBU properties, are conducted through our TRS. The TRS subsidiaries are subject to U.S. federal and state corporate income tax. The New Zealand timber operations are conducted by the New Zealand subsidiary, which is subject to corporate-level tax at 28% in New Zealand and is treated as a partnership for U.S. income tax purposes.
PROVISION FOR INCOME TAXES FROM CONTINUING OPERATIONS
The provision for income taxes for each of the three years ended December 31 follows:
 
202220212020
Current
U.S. federal
($2,797)($1,893)($237)
State
(371)(536)(339)
Foreign
(2,694)(11,425)(5,391)
(5,862)(13,854)(5,967)
Deferred
U.S. federal
2,302 (6,288)8,355 
State
1,693 (1,623)325 
Foreign
(3,583)(2,007)(3,027)
412 (9,918)5,653 
Changes in valuation allowance
(3,939)9,111 (6,695)
Total
($9,389)($14,661)($7,009)
    A reconciliation of the U.S. federal statutory income tax rate to the actual income tax rate for each of the three years ended December 31 follows:
 202220212020
U.S. federal statutory income tax rate($27,758)(21.0)%($47,280)(21.0)%($7,726)(21.0)%
U.S. and foreign REIT income29,732 22.5 44,316 19.7 16,569 45.0 
Matariki Group and Rayonier New Zealand Ltd(5,038)(3.8)(12,927)(5.7)(7,698)(20.8)
Change in valuation allowance(3,939)(3.0)9,111 4.0 (6,695)(18.2)
REIT Built-in Gain(2,516)(1.9)(2,215)(1.0)— — 
State Net Operating Loss— — — — 1,118 3.0 
Prepaid land sales— — — — (1,084)(2.9)
Foreign income tax withholding(1,239)(0.9)(505)(0.2)(721)(2.0)
Sale of Timber Funds— — (2,399)(1.1)— — 
State Income Tax, Net of Federal Benefit1,424 1.1 — — — — 
Bainbridge Landing JV, NCI2,496 1.8 — — — — 
Other(2,551)(1.9)(2,762)(1.2)(772)(2.1)
Income tax expense as reported for net income($9,389)(7.1)%($14,661)(6.5)%($7,009)(19.0)%
The Company’s effective tax rate is below the 21 percent U.S. statutory rate primarily due to tax benefits associated with being a REIT.
DEFERRED TAXES
Deferred income taxes result from differences between the timing of recognizing revenues and expenses for financial book purposes versus income tax purposes. The nature of the temporary differences and the resulting net deferred tax asset/liability for the two years ended December 31 follows:
 20222021
Gross deferred tax assets:
Pension, postretirement and other employee benefits$489 $597 
New Zealand subsidiary20,753 21,790 
CBPC tax credit carry forwards13,688 13,701 
Capitalized real estate costs2,457 1,656 
U.S. TRS net operating loss23,885 12,489 
Land basis difference— 9,061 
Other4,808 5,367 
Total gross deferred tax assets66,080 64,661 
Less: Valuation allowance(40,844)(36,904)
Total deferred tax assets after valuation allowance$25,236 $27,757 
Gross deferred tax liabilities:
Accelerated depreciation(9)(46)
New Zealand subsidiary(88,414)(91,388)
Other(4,558)(6,059)
Total gross deferred tax liabilities(92,981)(97,493)
Net deferred tax liability reported as noncurrent($67,745)($69,736)
Net operating loss (“NOL”) and tax credit carryforwards as of the two years ended December 31 follows: 
Tax Effected BalanceExpiration
2022
U.S. Federal NOL Carryforwards- Post TCJA (a)$20,538 None
U.S State NOL Carryforwards (b)3,347 Various
Cellulosic Biofuel Producer Credit (c)13,688 2024
2021
U.S. Federal NOL Carryforwards- Post TCJA (a)$10,687 None
U.S State NOL Carryforwards (b)1,802 Various
Cellulosic Biofuel Producer Credit (c)13,701 2023
(a)The Tax Cuts and Jobs Act (TCJA) was signed into law on December 22, 2017. The TCJA lifted the 20-year federal NOL Carryforward period. Net operating losses generated after December 31, 2017 have an indefinite carryforward period.
(b)The U.S. state NOL is made up of several jurisdictions that expire in various future years. No state NOL is set to expire before December 31, 2033.
(c)The Inflation Reduction Act of 2022 was signed into law on August 16, 2022. The Inflation Reduction Act of 2022 temporarily extended existing fuels tax credits that previously expired or were set to expire at the end of 2023. The Cellulosic Biofuel Producer Credit was one of the credits extended under this act.

We record a valuation allowance to reduce the carrying amounts of deferred tax assets if it is more likely than not that such deferred tax assets will not be realized. Since 2015, we have had a 100% valuation allowance against the U.S. taxable REIT subsidiary's deferred tax assets, net of deferred tax liabilities. During 2022, the net deferred tax assets increased by $4.0 million. As a result, we recorded a change in the valuation allowance of $4.0 million related to the U.S. TRS's deferred tax assets, net of liabilities.
TAX STATUTES
The following table provides detail of the tax years that remain open to examination by the IRS and other significant taxing jurisdictions:
Taxing JurisdictionOpen Tax Years
U.S. Internal Revenue Service2019 - 2021
New Zealand Inland Revenue2017 - 2021

TAX CHARACTERISTICS OF DIVIDEND DISTRIBUTIONS
The taxable nature of the dividend distributions paid for each of the three years ended December 31 follows:
 
202220212020
Total dividends/distributions paid per common share/unit
$1.125 $1.08 $1.08 
Tax characteristics:
Capital gain100 %100 %100 %