Nighttime view of the Virginia State Capitol in Richmond, Virginia

Governor Signs Legislation Placing Limits on Land Preservation Tax Credit

According to Virginia’s Legislative Information Service, Virginia Governor Terry McAuliffe has now signed House Bill 1828 into law. As reported previously, H.B. 1828 places new limits on the land preservation tax credit, which is a tax incentive designed to encourage donations of conservation easements as well as outright donations of land. Governor McAuliffe approved the bill on March 17, 2015. The bill is being published as Chapter 235 of the 2015 Virginia Acts of Assembly.

Interestingly, the Legislative Information Service does not indicate that Governor McAuliffe has signed Senate Bill 1019 into law. S.B. 1019 was a companion bill to House Bill 1828 and is completely identical to H.B. 1828. This is possibly an oversight on the part of the Legislative Information Service. However, even if only one of the two bills has been approved by the Governor, the new limitations on the land preservation tax credit have become law. The new law will take effect on July 1, 2015 pursuant to the default rules imposed by Article IV, Section 13 of the Virginia Constitution.

To summarize, this new legislation will limit the land preservation tax credit in the following ways:

  • The new legislation will place additional limits on the amount of tax credit that any particular taxpayer may use to offset his taxes in a given year. The limit was $100,000 per taxpayer for Tax Year 2014. Because of the new legislation, the limit will drop to $20,000 per taxpayer for Tax Year 2015, $20,000 per taxpayer for Tax Year 2016, and $50,000 per taxpayer for each tax year thereafter.
  • Beginning in 2015, the new legislation will cap the statewide amount of credits that may be issued in a given calendar year at $75 million. In 2014, this cap had been $100 million.
  • A taxpayer wishing to register land preservation tax credits must now do so on or before December 31 of the calendar year following the donation.

This is only a brief summary of the provisions of H.B. 1828 and S.B. 1019; I analyzed these provisions more thoroughly in a previous post. Stay tuned for continued coverage on the impact of this new legislation on land preservation in Virginia.

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Derrick P. Fellows

Derrick P. Fellows is an attorney with Hawthorne & Hawthorne, P.C. in Victoria, Virginia. Follow him on Twitter at @dpfellows.