§ 58.1-512. Land preservation tax credits for individuals and corporations.
A. (Effective for taxable years beginning before January 1, 2011) For taxableyears beginning on or after January 1, 2000, there shall be allowed as acredit against the tax liability imposed by §§ 58.1-320 and 58.1-400, anamount equal to 50% of the fair market value of any land or interest in landlocated in Virginia which is conveyed for the purpose of agricultural andforestal use, open space, natural resource, and/or biodiversity conservation,or land, agricultural, watershed and/or historic preservation, as anunconditional donation by the landowner/taxpayer to a public or privateconservation agency eligible to hold such land and interests therein forconservation or preservation purposes. For such conveyances made on or afterJanuary 1, 2007, the tax credit shall be 40% of the fair market value of theland or interest in land so conveyed.
A. (Effective for taxable years beginning on or after January 1, 2011) Fortaxable years beginning on or after January 1, 2000, there shall be allowedas a credit against the tax liability imposed by §§ 58.1-320 and 58.1-400, anamount equal to 50 percent of the fair market value of any land or interestin land located in Virginia which is conveyed for the purpose of agriculturaland forestal use, open space, natural resource, and/or biodiversityconservation, or land, agricultural, watershed and/or historic preservation,as an unconditional donation by the landowner/taxpayer to a public or privateconservation agency eligible to hold such land and interests therein forconservation or preservation purposes. For such conveyances made on or afterJanuary 1, 2007, the tax credit shall be 40 percent of the fair market valueof the land or interest in land so conveyed.
B. The fair market value of qualified donations made under this section shallbe determined in accordance with § 58.1-512.1 and substantiated by a"qualified appraisal" prepared by a "qualified appraiser," as those termsare defined under applicable federal law and regulations governing charitablecontributions. The value of the donated interest in land that qualifies forcredit under this section, as determined according to appropriate federal lawand regulations, shall be subject to the limits established by United StatesInternal Revenue Code § 170(e). In order to qualify for a tax credit underthis section, the qualified appraisal shall be signed by the qualifiedappraiser, who must be licensed in the Commonwealth of Virginia as providedin § 54.1-2011, and a copy of the appraisal shall be submitted to theDepartment. In the event that any appraiser falsely or fraudulentlyoverstates the value of the contributed property in an appraisal that theappraiser has signed, the Department may disallow further appraisals signedby the appraiser and shall refer the appraiser to the Real Estate AppraiserBoard for appropriate disciplinary action pursuant to § 54.1-2013, which mayinclude, but need not be limited to, revocation of the appraiser's license.Any appraisal that, upon audit by the Department, is determined to be falseor fraudulent, may be disregarded by the Department in determining the fairmarket value of the property and the amount of tax credit to be allowed underthis section.
C. 1. (Effective for taxable years beginning before January 1, 2011) Theamount of the credit that may be claimed by each taxpayer, including creditclaimed by applying unused credits as provided under subsection C of §58.1-513, shall not exceed $50,000 for 2000 taxable years, $75,000 for 2001taxable years, $100,000 for each of 2002 through 2008 taxable years, $50,000for each of 2009 and 2010 taxable years, and $100,000 for 2011 taxable yearsand for each taxable year thereafter. In addition, for each taxpayer, in anyone taxable year the credit used may not exceed the amount of individual,fiduciary or corporate income tax otherwise due. Any portion of the creditthat is unused in any one taxable year may be carried over for a maximum of10 consecutive taxable years following the taxable year in which the creditoriginated until fully expended. For taxpayers affected by the creditreduction for taxable years 2009 and 2010, any portion of the credit that isunused in any one taxable year may be carried over for a maximum of 12consecutive taxable years following the taxable year in which the creditoriginated until fully expended.
C. 1. (Effective for taxable years beginning on or after January 1, 2011) Theamount of the credit that may be claimed by each taxpayer, including creditclaimed by applying unused credits as provided under subsection C of §58.1-513, shall not exceed $50,000 for 2000 taxable years, $75,000 for 2001taxable years, $100,000 for each of 2002 through 2008 taxable years, $50,000for each of 2009, 2010, and 2011 taxable years, and $100,000 for 2012 taxableyears and for each taxable year thereafter. In addition, for each taxpayer,in any one taxable year the credit used may not exceed the amount ofindividual, fiduciary or corporate income tax otherwise due. Any portion ofthe credit that is unused in any one taxable year may be carried over for amaximum of 10 consecutive taxable years following the taxable year in whichthe credit originated until fully expended. For taxpayers affected by thecredit reduction for taxable years 2009, 2010, and 2011, any portion of thecredit that is unused in any one taxable year may be carried over for amaximum of 13 consecutive taxable years following the taxable year in whichthe credit originated until fully expended.
2. Qualified donations shall include the conveyance of a fee interest in realproperty or the conveyance in perpetuity of a less-than-fee interest in realproperty, such as a conservation restriction, preservation restriction,agricultural preservation restriction, or watershed preservation restriction,provided that such less-than-fee interest qualifies as a charitable deductionunder § 170(h) of the United States Internal Revenue Code of 1986, as amended.
The Department of Conservation and Recreation shall compile an annual reporton qualified donations of less-than-fee interests accepted by any public orprivate conservation agency in the respective calendar year and shall submitthe report by December 1 of each year to the Chairmen of the House Committeeon Appropriations, House Committee on Finance, and the Senate Committee onFinance. In preparing such report, the Department of Conservation andRecreation shall consult and coordinate with the Department of Taxation andthe Departments of Forestry and Agriculture and Consumer Services to providean estimate of the number of acres of land currently being used for"production agriculture and silviculture" as defined in § 3.2-300 that havebeen protected by qualified donations of less-than-fee interests. This reportshall include information, when available, on land qualifying for creditsbeing used for "production agriculture and silviculture" that have onsiteoperational best management practices, which are designed to reduce theamount of nutrients and sediment entering public waters. This informationshall be reported in summary fashion as appropriate to preserveconfidentiality of information. Qualified donations shall not include theconveyance of a fee interest, or a less-than-fee interest, in real propertyby a charitable organization that (i) meets the definition of "holder" in §10.1-1009 and (ii) holds one or more conservation easements acquired pursuantto the authority conferred on a "holder" by § 10.1-1010.
3. Any fee interest, or a less-than-fee interest, in real property that hasbeen dedicated as open space within, or as part of, a residential subdivisionor any other type of residential or commercial development; dedicated as openspace in, or as part of, any real estate development plan; or dedicated forthe purpose of fulfilling density requirements to obtain approvals forzoning, subdivision, site plan, or building permits shall not be a qualifieddonation under this article.
4. Qualified donations shall be eligible for the tax credit herein describedif such donations are made to the Commonwealth of Virginia, aninstrumentality thereof, or a charitable organization described in § 501(c)(3) of the United States Internal Revenue Code of 1986, as amended, if suchcharitable organization (i) meets the requirements of § 509(a) (2) or (ii)meets the requirements of § 509(a) (3) and is controlled by an organizationdescribed in § 509(a) (2).
5. The preservation, agricultural preservation, historic preservation orsimilar use and purpose of such property shall be assured in perpetuity. Inthe case of conveyances of a fee interest to a charitable organization thatis a "holder" as defined in § 10.1-1009, the credit shall not be alloweduntil the charitable organization agrees that subsequent conveyances of thefee interest in the property will be (i) subject to a previous conveyance inperpetuity of a conservation easement, as that term is defined in §10.1-1009, or subject to the conveyance in perpetuity of an open-spaceeasement, as that term is defined in § 10.1-1700, or (ii) conveyed to theCommonwealth of Virginia or to a federal conservation agency. No credit shallbe allowed with respect to any subsequent conveyances by the charitableorganization.
D. The issuance of tax credits under this article for donations made on andafter January 1, 2007, shall be in accordance with procedures and deadlinesestablished by the Department and shall be administered under the followingconditions:
1. The taxpayer shall apply for a credit after completing the donation bysubmitting a form or forms prescribed by the Department in consultation withthe Department of Conservation and Recreation. If the application requests acredit of $1 million or more or if the donation meets the conditions ofsubdivision 3 c, then a copy of the application shall also be filed with theDepartment of Conservation and Recreation by the taxpayer. The applicationshall include, but not be limited to:
a. A description of the conservation purpose or purposes being served by thedonation;
b. The fair market value of land being donated in the absence of any easementor other restriction;
c. The public benefit derived from the donation;
d. The extent to which water quality best management practices will beimplemented on the property; and
e. Whether the property is fully or partially forested and a forestmanagement plan is included in the terms of the donation.
2. Applications for otherwise qualified donations of a less-than-fee interestshall be accompanied by an affidavit describing how the donated interest inland meets the requirements of § 170(h) of the United States Internal RevenueCode of 1986, as amended, and the regulations adopted thereunder. Theapplication with accompanying affidavit shall be submitted to the Departmentof Taxation, with a copy also provided to the Department of Conservation andRecreation.
3. a. No credit in the amount of $1 million or more shall be issued withrespect to a donation unless the conservation value of the donation has beenverified by the Director of the Department of Conservation and Recreation,based on the criteria adopted by the Virginia Land Conservation Foundationfor this purpose. Such criteria and subsequent amendments shall be exemptfrom the Administrative Process Act (§ 2.2-4000 et seq.), but the VirginiaLand Conservation Foundation shall provide for adequate public participation,including adequate notice and opportunity to provide comments on the proposedcriteria. The Director shall act on applications within 90 days of hisreceipt of a complete application and shall notify the taxpayer and theDepartment of Taxation of his action.
b. For purposes of determining whether a credit requires verification of theconservation value, the credits allowed under this article with respect todonations of any other portion of a recorded parcel of land within thepreceding 11 years shall be aggregated with the credit claimed for thecurrent donation. This subdivision shall not apply if (i) all owners of theparcel who have been allowed credit for a qualified donation are notaffiliated with the person or entity seeking credit for the current donationof a different portion of the parcel and (ii) in the case of an individualseeking credit, the individual has not previously made a qualified donationfor any portion of the parcel and is not an immediate family member of anysuch owners.
c. If (i) the real property that is the subject of the donation waspartitioned from or part of another parcel of land and any other portion ofsuch parcel, or any land partitioned from such parcel of land, has beenallowed a tax credit under this article (or an application for tax credit ispending) within three years of such donation and (ii) the tax credit thatwould otherwise be allowed to the donor for such donation is at least$250,000, then no credit under this article shall be issued with respect tosuch donation described in clause (i) unless the conservation value of thedonation has been verified by the Director of the Department of Conservationand Recreation. The Director shall act on applications within 90 days of hisreceipt of a complete application and shall notify the taxpayer and theDepartment of Taxation of his action. Nothing in this subdivision shall beconstrued or interpreted (i) as allowing additional tax credit for any landor interest in land previously conveyed for which tax credit has already beenallowed under this article or (ii) affecting the validity of any tax creditallowed under this article for a prior conveyance of any land or interest inland.
4. a. Tax credits shall be issued on a calendar year basis, and in no caseshall the Department issue more than the maximum allowed for the calendaryear. For donations made in calendar year 2007 the maximum allowed is $100million. The credits shall be issued in the order that each completeapplication is received. If more than one application is received at the sametime, the credits with respect to those applications shall be issued in theorder that the conveyances were recorded in the appropriate circuit court ofthe Commonwealth. In the event that a credit requires verification of theconservation value by the Department of Conservation and Recreation and suchverification has not been received at the time the maximum $100 millionallowed is reached for the calendar year of the donation, such credit shallnot be issued for that calendar year but shall be issued in the calendar yearthat the conservation value of the credit is verified by the Department ofConservation and Recreation.
b. Beginning with calendar year 2008, the $100 million amount contained insubdivision 4 a shall be increased by an amount equal to $100 millionmultiplied by the percentage by which the consumer price index for all-urbanconsumers published by the United States Department of Labor (CPI-U) for the12-month period ending August 31 of the preceding year exceeds the CPI-U forthe 12-month period ending August 31, 2006.
5. (Effective for taxable years beginning before January 1, 2011) a. Anytaxpayer that has been issued a tax credit by the Department shall be allowedto use such credit for his or its taxable year that begins in the calendaryear for which such credit was issued and for succeeding taxable years inaccordance with the 10 consecutive taxable year carryforward provisions ofthis article, except for any taxpayer affected by the credit limitation fortaxable years 2009 and 2010. Such a taxpayer shall be allowed to use suchcredit for his or its taxable year that begins in the calendar year for whichsuch credit was issued and for succeeding taxable years in accordance withthe 12 consecutive taxable year carryforward provisions of this article.
b. Any taxpayer to whom a credit has been transferred may use such credit forthe taxable year in which the transfer occurred and unused amounts may becarried forward to succeeding taxable years, but in no event may suchtransferred credit be used more than 11 years after it was originally issuedby the Department or in any taxable year of such taxpayer that ended prior tothe date of transfer, except for any taxpayer affected by the creditlimitation for taxable years 2009 and 2010. Such a taxpayer may use suchcredit for the taxable year in which the transfer occurred and unused amountsmay be carried forward to succeeding taxable years, but in no event may suchtransferred credit be used more than 13 years after it was originally issuedby the Department or in any taxable year of such taxpayer that ended prior tothe date of transfer.
5. (Effective for taxable years beginning on or after January 1, 2011) a. Anytaxpayer that has been issued a tax credit by the Department shall be allowedto use such credit for his or its taxable year that begins in the calendaryear for which such credit was issued and for succeeding taxable years inaccordance with the 10 consecutive taxable year carryforward provisions ofthis article, except for any taxpayer affected by the credit limitation fortaxable years 2009, 2010, and 2011. Such a taxpayer shall be allowed to usesuch credit for his or its taxable year that begins in the calendar year forwhich such credit was issued and for succeeding taxable years in accordancewith the 13 consecutive taxable year carryforward provisions of this article.
b. Any taxpayer to whom a credit has been transferred may use such credit forthe taxable year in which the transfer occurred and unused amounts may becarried forward to succeeding taxable years, but in no event may suchtransferred credit be used more than 11 years after it was originally issuedby the Department or in any taxable year of such taxpayer that ended prior tothe date of transfer, except for any taxpayer affected by the creditlimitation for taxable years 2009, 2010, and 2011. Such a taxpayer may usesuch credit for the taxable year in which the transfer occurred and unusedamounts may be carried forward to succeeding taxable years, but in no eventmay such transferred credit be used more than 14 years after it wasoriginally issued by the Department or in any taxable year of such taxpayerthat ended prior to the date of transfer.
6. Neither the verification of conservation value by the Department ofConservation and Recreation nor the issuance of a credit by the Department ofTaxation shall in any way be construed or interpreted as prohibiting theDepartment of Taxation or the Tax Commissioner from auditing any creditclaimed pursuant to the provisions of this article or from assessing taxrelating to the claiming of any credit under this article.
E. In any review or appeal before the Tax Commissioner or in any court in theCommonwealth the burden of proof shall be on the taxpayer to show that thefair market value and conservation value at the time of the qualifieddonation is consistent with this section and that all requirements of thisarticle have been satisfied.
(1999, cc. 968, 983; 2005, c. 940; 2006, Sp. Sess. I, cc. 4, 5; 2009, cc. 12,510; 2010, cc. 246, 265, 321, 384.)
§ 58.1-512. Land preservation tax credits for individuals and corporations.
A. (Effective for taxable years beginning before January 1, 2011) For taxableyears beginning on or after January 1, 2000, there shall be allowed as acredit against the tax liability imposed by §§ 58.1-320 and 58.1-400, anamount equal to 50% of the fair market value of any land or interest in landlocated in Virginia which is conveyed for the purpose of agricultural andforestal use, open space, natural resource, and/or biodiversity conservation,or land, agricultural, watershed and/or historic preservation, as anunconditional donation by the landowner/taxpayer to a public or privateconservation agency eligible to hold such land and interests therein forconservation or preservation purposes. For such conveyances made on or afterJanuary 1, 2007, the tax credit shall be 40% of the fair market value of theland or interest in land so conveyed.
A. (Effective for taxable years beginning on or after January 1, 2011) Fortaxable years beginning on or after January 1, 2000, there shall be allowedas a credit against the tax liability imposed by §§ 58.1-320 and 58.1-400, anamount equal to 50 percent of the fair market value of any land or interestin land located in Virginia which is conveyed for the purpose of agriculturaland forestal use, open space, natural resource, and/or biodiversityconservation, or land, agricultural, watershed and/or historic preservation,as an unconditional donation by the landowner/taxpayer to a public or privateconservation agency eligible to hold such land and interests therein forconservation or preservation purposes. For such conveyances made on or afterJanuary 1, 2007, the tax credit shall be 40 percent of the fair market valueof the land or interest in land so conveyed.
B. The fair market value of qualified donations made under this section shallbe determined in accordance with § 58.1-512.1 and substantiated by a"qualified appraisal" prepared by a "qualified appraiser," as those termsare defined under applicable federal law and regulations governing charitablecontributions. The value of the donated interest in land that qualifies forcredit under this section, as determined according to appropriate federal lawand regulations, shall be subject to the limits established by United StatesInternal Revenue Code § 170(e). In order to qualify for a tax credit underthis section, the qualified appraisal shall be signed by the qualifiedappraiser, who must be licensed in the Commonwealth of Virginia as providedin § 54.1-2011, and a copy of the appraisal shall be submitted to theDepartment. In the event that any appraiser falsely or fraudulentlyoverstates the value of the contributed property in an appraisal that theappraiser has signed, the Department may disallow further appraisals signedby the appraiser and shall refer the appraiser to the Real Estate AppraiserBoard for appropriate disciplinary action pursuant to § 54.1-2013, which mayinclude, but need not be limited to, revocation of the appraiser's license.Any appraisal that, upon audit by the Department, is determined to be falseor fraudulent, may be disregarded by the Department in determining the fairmarket value of the property and the amount of tax credit to be allowed underthis section.
C. 1. (Effective for taxable years beginning before January 1, 2011) Theamount of the credit that may be claimed by each taxpayer, including creditclaimed by applying unused credits as provided under subsection C of §58.1-513, shall not exceed $50,000 for 2000 taxable years, $75,000 for 2001taxable years, $100,000 for each of 2002 through 2008 taxable years, $50,000for each of 2009 and 2010 taxable years, and $100,000 for 2011 taxable yearsand for each taxable year thereafter. In addition, for each taxpayer, in anyone taxable year the credit used may not exceed the amount of individual,fiduciary or corporate income tax otherwise due. Any portion of the creditthat is unused in any one taxable year may be carried over for a maximum of10 consecutive taxable years following the taxable year in which the creditoriginated until fully expended. For taxpayers affected by the creditreduction for taxable years 2009 and 2010, any portion of the credit that isunused in any one taxable year may be carried over for a maximum of 12consecutive taxable years following the taxable year in which the creditoriginated until fully expended.
C. 1. (Effective for taxable years beginning on or after January 1, 2011) Theamount of the credit that may be claimed by each taxpayer, including creditclaimed by applying unused credits as provided under subsection C of §58.1-513, shall not exceed $50,000 for 2000 taxable years, $75,000 for 2001taxable years, $100,000 for each of 2002 through 2008 taxable years, $50,000for each of 2009, 2010, and 2011 taxable years, and $100,000 for 2012 taxableyears and for each taxable year thereafter. In addition, for each taxpayer,in any one taxable year the credit used may not exceed the amount ofindividual, fiduciary or corporate income tax otherwise due. Any portion ofthe credit that is unused in any one taxable year may be carried over for amaximum of 10 consecutive taxable years following the taxable year in whichthe credit originated until fully expended. For taxpayers affected by thecredit reduction for taxable years 2009, 2010, and 2011, any portion of thecredit that is unused in any one taxable year may be carried over for amaximum of 13 consecutive taxable years following the taxable year in whichthe credit originated until fully expended.
2. Qualified donations shall include the conveyance of a fee interest in realproperty or the conveyance in perpetuity of a less-than-fee interest in realproperty, such as a conservation restriction, preservation restriction,agricultural preservation restriction, or watershed preservation restriction,provided that such less-than-fee interest qualifies as a charitable deductionunder § 170(h) of the United States Internal Revenue Code of 1986, as amended.
The Department of Conservation and Recreation shall compile an annual reporton qualified donations of less-than-fee interests accepted by any public orprivate conservation agency in the respective calendar year and shall submitthe report by December 1 of each year to the Chairmen of the House Committeeon Appropriations, House Committee on Finance, and the Senate Committee onFinance. In preparing such report, the Department of Conservation andRecreation shall consult and coordinate with the Department of Taxation andthe Departments of Forestry and Agriculture and Consumer Services to providean estimate of the number of acres of land currently being used for"production agriculture and silviculture" as defined in § 3.2-300 that havebeen protected by qualified donations of less-than-fee interests. This reportshall include information, when available, on land qualifying for creditsbeing used for "production agriculture and silviculture" that have onsiteoperational best management practices, which are designed to reduce theamount of nutrients and sediment entering public waters. This informationshall be reported in summary fashion as appropriate to preserveconfidentiality of information. Qualified donations shall not include theconveyance of a fee interest, or a less-than-fee interest, in real propertyby a charitable organization that (i) meets the definition of "holder" in §10.1-1009 and (ii) holds one or more conservation easements acquired pursuantto the authority conferred on a "holder" by § 10.1-1010.
3. Any fee interest, or a less-than-fee interest, in real property that hasbeen dedicated as open space within, or as part of, a residential subdivisionor any other type of residential or commercial development; dedicated as openspace in, or as part of, any real estate development plan; or dedicated forthe purpose of fulfilling density requirements to obtain approvals forzoning, subdivision, site plan, or building permits shall not be a qualifieddonation under this article.
4. Qualified donations shall be eligible for the tax credit herein describedif such donations are made to the Commonwealth of Virginia, aninstrumentality thereof, or a charitable organization described in § 501(c)(3) of the United States Internal Revenue Code of 1986, as amended, if suchcharitable organization (i) meets the requirements of § 509(a) (2) or (ii)meets the requirements of § 509(a) (3) and is controlled by an organizationdescribed in § 509(a) (2).
5. The preservation, agricultural preservation, historic preservation orsimilar use and purpose of such property shall be assured in perpetuity. Inthe case of conveyances of a fee interest to a charitable organization thatis a "holder" as defined in § 10.1-1009, the credit shall not be alloweduntil the charitable organization agrees that subsequent conveyances of thefee interest in the property will be (i) subject to a previous conveyance inperpetuity of a conservation easement, as that term is defined in §10.1-1009, or subject to the conveyance in perpetuity of an open-spaceeasement, as that term is defined in § 10.1-1700, or (ii) conveyed to theCommonwealth of Virginia or to a federal conservation agency. No credit shallbe allowed with respect to any subsequent conveyances by the charitableorganization.
D. The issuance of tax credits under this article for donations made on andafter January 1, 2007, shall be in accordance with procedures and deadlinesestablished by the Department and shall be administered under the followingconditions:
1. The taxpayer shall apply for a credit after completing the donation bysubmitting a form or forms prescribed by the Department in consultation withthe Department of Conservation and Recreation. If the application requests acredit of $1 million or more or if the donation meets the conditions ofsubdivision 3 c, then a copy of the application shall also be filed with theDepartment of Conservation and Recreation by the taxpayer. The applicationshall include, but not be limited to:
a. A description of the conservation purpose or purposes being served by thedonation;
b. The fair market value of land being donated in the absence of any easementor other restriction;
c. The public benefit derived from the donation;
d. The extent to which water quality best management practices will beimplemented on the property; and
e. Whether the property is fully or partially forested and a forestmanagement plan is included in the terms of the donation.
2. Applications for otherwise qualified donations of a less-than-fee interestshall be accompanied by an affidavit describing how the donated interest inland meets the requirements of § 170(h) of the United States Internal RevenueCode of 1986, as amended, and the regulations adopted thereunder. Theapplication with accompanying affidavit shall be submitted to the Departmentof Taxation, with a copy also provided to the Department of Conservation andRecreation.
3. a. No credit in the amount of $1 million or more shall be issued withrespect to a donation unless the conservation value of the donation has beenverified by the Director of the Department of Conservation and Recreation,based on the criteria adopted by the Virginia Land Conservation Foundationfor this purpose. Such criteria and subsequent amendments shall be exemptfrom the Administrative Process Act (§ 2.2-4000 et seq.), but the VirginiaLand Conservation Foundation shall provide for adequate public participation,including adequate notice and opportunity to provide comments on the proposedcriteria. The Director shall act on applications within 90 days of hisreceipt of a complete application and shall notify the taxpayer and theDepartment of Taxation of his action.
b. For purposes of determining whether a credit requires verification of theconservation value, the credits allowed under this article with respect todonations of any other portion of a recorded parcel of land within thepreceding 11 years shall be aggregated with the credit claimed for thecurrent donation. This subdivision shall not apply if (i) all owners of theparcel who have been allowed credit for a qualified donation are notaffiliated with the person or entity seeking credit for the current donationof a different portion of the parcel and (ii) in the case of an individualseeking credit, the individual has not previously made a qualified donationfor any portion of the parcel and is not an immediate family member of anysuch owners.
c. If (i) the real property that is the subject of the donation waspartitioned from or part of another parcel of land and any other portion ofsuch parcel, or any land partitioned from such parcel of land, has beenallowed a tax credit under this article (or an application for tax credit ispending) within three years of such donation and (ii) the tax credit thatwould otherwise be allowed to the donor for such donation is at least$250,000, then no credit under this article shall be issued with respect tosuch donation described in clause (i) unless the conservation value of thedonation has been verified by the Director of the Department of Conservationand Recreation. The Director shall act on applications within 90 days of hisreceipt of a complete application and shall notify the taxpayer and theDepartment of Taxation of his action. Nothing in this subdivision shall beconstrued or interpreted (i) as allowing additional tax credit for any landor interest in land previously conveyed for which tax credit has already beenallowed under this article or (ii) affecting the validity of any tax creditallowed under this article for a prior conveyance of any land or interest inland.
4. a. Tax credits shall be issued on a calendar year basis, and in no caseshall the Department issue more than the maximum allowed for the calendaryear. For donations made in calendar year 2007 the maximum allowed is $100million. The credits shall be issued in the order that each completeapplication is received. If more than one application is received at the sametime, the credits with respect to those applications shall be issued in theorder that the conveyances were recorded in the appropriate circuit court ofthe Commonwealth. In the event that a credit requires verification of theconservation value by the Department of Conservation and Recreation and suchverification has not been received at the time the maximum $100 millionallowed is reached for the calendar year of the donation, such credit shallnot be issued for that calendar year but shall be issued in the calendar yearthat the conservation value of the credit is verified by the Department ofConservation and Recreation.
b. Beginning with calendar year 2008, the $100 million amount contained insubdivision 4 a shall be increased by an amount equal to $100 millionmultiplied by the percentage by which the consumer price index for all-urbanconsumers published by the United States Department of Labor (CPI-U) for the12-month period ending August 31 of the preceding year exceeds the CPI-U forthe 12-month period ending August 31, 2006.
5. (Effective for taxable years beginning before January 1, 2011) a. Anytaxpayer that has been issued a tax credit by the Department shall be allowedto use such credit for his or its taxable year that begins in the calendaryear for which such credit was issued and for succeeding taxable years inaccordance with the 10 consecutive taxable year carryforward provisions ofthis article, except for any taxpayer affected by the credit limitation fortaxable years 2009 and 2010. Such a taxpayer shall be allowed to use suchcredit for his or its taxable year that begins in the calendar year for whichsuch credit was issued and for succeeding taxable years in accordance withthe 12 consecutive taxable year carryforward provisions of this article.
b. Any taxpayer to whom a credit has been transferred may use such credit forthe taxable year in which the transfer occurred and unused amounts may becarried forward to succeeding taxable years, but in no event may suchtransferred credit be used more than 11 years after it was originally issuedby the Department or in any taxable year of such taxpayer that ended prior tothe date of transfer, except for any taxpayer affected by the creditlimitation for taxable years 2009 and 2010. Such a taxpayer may use suchcredit for the taxable year in which the transfer occurred and unused amountsmay be carried forward to succeeding taxable years, but in no event may suchtransferred credit be used more than 13 years after it was originally issuedby the Department or in any taxable year of such taxpayer that ended prior tothe date of transfer.
5. (Effective for taxable years beginning on or after January 1, 2011) a. Anytaxpayer that has been issued a tax credit by the Department shall be allowedto use such credit for his or its taxable year that begins in the calendaryear for which such credit was issued and for succeeding taxable years inaccordance with the 10 consecutive taxable year carryforward provisions ofthis article, except for any taxpayer affected by the credit limitation fortaxable years 2009, 2010, and 2011. Such a taxpayer shall be allowed to usesuch credit for his or its taxable year that begins in the calendar year forwhich such credit was issued and for succeeding taxable years in accordancewith the 13 consecutive taxable year carryforward provisions of this article.
b. Any taxpayer to whom a credit has been transferred may use such credit forthe taxable year in which the transfer occurred and unused amounts may becarried forward to succeeding taxable years, but in no event may suchtransferred credit be used more than 11 years after it was originally issuedby the Department or in any taxable year of such taxpayer that ended prior tothe date of transfer, except for any taxpayer affected by the creditlimitation for taxable years 2009, 2010, and 2011. Such a taxpayer may usesuch credit for the taxable year in which the transfer occurred and unusedamounts may be carried forward to succeeding taxable years, but in no eventmay such transferred credit be used more than 14 years after it wasoriginally issued by the Department or in any taxable year of such taxpayerthat ended prior to the date of transfer.
6. Neither the verification of conservation value by the Department ofConservation and Recreation nor the issuance of a credit by the Department ofTaxation shall in any way be construed or interpreted as prohibiting theDepartment of Taxation or the Tax Commissioner from auditing any creditclaimed pursuant to the provisions of this article or from assessing taxrelating to the claiming of any credit under this article.
E. In any review or appeal before the Tax Commissioner or in any court in theCommonwealth the burden of proof shall be on the taxpayer to show that thefair market value and conservation value at the time of the qualifieddonation is consistent with this section and that all requirements of thisarticle have been satisfied.
(1999, cc. 968, 983; 2005, c. 940; 2006, Sp. Sess. I, cc. 4, 5; 2009, cc. 12,510; 2010, cc. 246, 265, 321, 384.)
§ 58.1-512. Land preservation tax credits for individuals and corporations.
A. (Effective for taxable years beginning before January 1, 2011) For taxableyears beginning on or after January 1, 2000, there shall be allowed as acredit against the tax liability imposed by §§ 58.1-320 and 58.1-400, anamount equal to 50% of the fair market value of any land or interest in landlocated in Virginia which is conveyed for the purpose of agricultural andforestal use, open space, natural resource, and/or biodiversity conservation,or land, agricultural, watershed and/or historic preservation, as anunconditional donation by the landowner/taxpayer to a public or privateconservation agency eligible to hold such land and interests therein forconservation or preservation purposes. For such conveyances made on or afterJanuary 1, 2007, the tax credit shall be 40% of the fair market value of theland or interest in land so conveyed.
A. (Effective for taxable years beginning on or after January 1, 2011) Fortaxable years beginning on or after January 1, 2000, there shall be allowedas a credit against the tax liability imposed by §§ 58.1-320 and 58.1-400, anamount equal to 50 percent of the fair market value of any land or interestin land located in Virginia which is conveyed for the purpose of agriculturaland forestal use, open space, natural resource, and/or biodiversityconservation, or land, agricultural, watershed and/or historic preservation,as an unconditional donation by the landowner/taxpayer to a public or privateconservation agency eligible to hold such land and interests therein forconservation or preservation purposes. For such conveyances made on or afterJanuary 1, 2007, the tax credit shall be 40 percent of the fair market valueof the land or interest in land so conveyed.
B. The fair market value of qualified donations made under this section shallbe determined in accordance with § 58.1-512.1 and substantiated by a"qualified appraisal" prepared by a "qualified appraiser," as those termsare defined under applicable federal law and regulations governing charitablecontributions. The value of the donated interest in land that qualifies forcredit under this section, as determined according to appropriate federal lawand regulations, shall be subject to the limits established by United StatesInternal Revenue Code § 170(e). In order to qualify for a tax credit underthis section, the qualified appraisal shall be signed by the qualifiedappraiser, who must be licensed in the Commonwealth of Virginia as providedin § 54.1-2011, and a copy of the appraisal shall be submitted to theDepartment. In the event that any appraiser falsely or fraudulentlyoverstates the value of the contributed property in an appraisal that theappraiser has signed, the Department may disallow further appraisals signedby the appraiser and shall refer the appraiser to the Real Estate AppraiserBoard for appropriate disciplinary action pursuant to § 54.1-2013, which mayinclude, but need not be limited to, revocation of the appraiser's license.Any appraisal that, upon audit by the Department, is determined to be falseor fraudulent, may be disregarded by the Department in determining the fairmarket value of the property and the amount of tax credit to be allowed underthis section.
C. 1. (Effective for taxable years beginning before January 1, 2011) Theamount of the credit that may be claimed by each taxpayer, including creditclaimed by applying unused credits as provided under subsection C of §58.1-513, shall not exceed $50,000 for 2000 taxable years, $75,000 for 2001taxable years, $100,000 for each of 2002 through 2008 taxable years, $50,000for each of 2009 and 2010 taxable years, and $100,000 for 2011 taxable yearsand for each taxable year thereafter. In addition, for each taxpayer, in anyone taxable year the credit used may not exceed the amount of individual,fiduciary or corporate income tax otherwise due. Any portion of the creditthat is unused in any one taxable year may be carried over for a maximum of10 consecutive taxable years following the taxable year in which the creditoriginated until fully expended. For taxpayers affected by the creditreduction for taxable years 2009 and 2010, any portion of the credit that isunused in any one taxable year may be carried over for a maximum of 12consecutive taxable years following the taxable year in which the creditoriginated until fully expended.
C. 1. (Effective for taxable years beginning on or after January 1, 2011) Theamount of the credit that may be claimed by each taxpayer, including creditclaimed by applying unused credits as provided under subsection C of §58.1-513, shall not exceed $50,000 for 2000 taxable years, $75,000 for 2001taxable years, $100,000 for each of 2002 through 2008 taxable years, $50,000for each of 2009, 2010, and 2011 taxable years, and $100,000 for 2012 taxableyears and for each taxable year thereafter. In addition, for each taxpayer,in any one taxable year the credit used may not exceed the amount ofindividual, fiduciary or corporate income tax otherwise due. Any portion ofthe credit that is unused in any one taxable year may be carried over for amaximum of 10 consecutive taxable years following the taxable year in whichthe credit originated until fully expended. For taxpayers affected by thecredit reduction for taxable years 2009, 2010, and 2011, any portion of thecredit that is unused in any one taxable year may be carried over for amaximum of 13 consecutive taxable years following the taxable year in whichthe credit originated until fully expended.
2. Qualified donations shall include the conveyance of a fee interest in realproperty or the conveyance in perpetuity of a less-than-fee interest in realproperty, such as a conservation restriction, preservation restriction,agricultural preservation restriction, or watershed preservation restriction,provided that such less-than-fee interest qualifies as a charitable deductionunder § 170(h) of the United States Internal Revenue Code of 1986, as amended.
The Department of Conservation and Recreation shall compile an annual reporton qualified donations of less-than-fee interests accepted by any public orprivate conservation agency in the respective calendar year and shall submitthe report by December 1 of each year to the Chairmen of the House Committeeon Appropriations, House Committee on Finance, and the Senate Committee onFinance. In preparing such report, the Department of Conservation andRecreation shall consult and coordinate with the Department of Taxation andthe Departments of Forestry and Agriculture and Consumer Services to providean estimate of the number of acres of land currently being used for"production agriculture and silviculture" as defined in § 3.2-300 that havebeen protected by qualified donations of less-than-fee interests. This reportshall include information, when available, on land qualifying for creditsbeing used for "production agriculture and silviculture" that have onsiteoperational best management practices, which are designed to reduce theamount of nutrients and sediment entering public waters. This informationshall be reported in summary fashion as appropriate to preserveconfidentiality of information. Qualified donations shall not include theconveyance of a fee interest, or a less-than-fee interest, in real propertyby a charitable organization that (i) meets the definition of "holder" in §10.1-1009 and (ii) holds one or more conservation easements acquired pursuantto the authority conferred on a "holder" by § 10.1-1010.
3. Any fee interest, or a less-than-fee interest, in real property that hasbeen dedicated as open space within, or as part of, a residential subdivisionor any other type of residential or commercial development; dedicated as openspace in, or as part of, any real estate development plan; or dedicated forthe purpose of fulfilling density requirements to obtain approvals forzoning, subdivision, site plan, or building permits shall not be a qualifieddonation under this article.
4. Qualified donations shall be eligible for the tax credit herein describedif such donations are made to the Commonwealth of Virginia, aninstrumentality thereof, or a charitable organization described in § 501(c)(3) of the United States Internal Revenue Code of 1986, as amended, if suchcharitable organization (i) meets the requirements of § 509(a) (2) or (ii)meets the requirements of § 509(a) (3) and is controlled by an organizationdescribed in § 509(a) (2).
5. The preservation, agricultural preservation, historic preservation orsimilar use and purpose of such property shall be assured in perpetuity. Inthe case of conveyances of a fee interest to a charitable organization thatis a "holder" as defined in § 10.1-1009, the credit shall not be alloweduntil the charitable organization agrees that subsequent conveyances of thefee interest in the property will be (i) subject to a previous conveyance inperpetuity of a conservation easement, as that term is defined in §10.1-1009, or subject to the conveyance in perpetuity of an open-spaceeasement, as that term is defined in § 10.1-1700, or (ii) conveyed to theCommonwealth of Virginia or to a federal conservation agency. No credit shallbe allowed with respect to any subsequent conveyances by the charitableorganization.
D. The issuance of tax credits under this article for donations made on andafter January 1, 2007, shall be in accordance with procedures and deadlinesestablished by the Department and shall be administered under the followingconditions:
1. The taxpayer shall apply for a credit after completing the donation bysubmitting a form or forms prescribed by the Department in consultation withthe Department of Conservation and Recreation. If the application requests acredit of $1 million or more or if the donation meets the conditions ofsubdivision 3 c, then a copy of the application shall also be filed with theDepartment of Conservation and Recreation by the taxpayer. The applicationshall include, but not be limited to:
a. A description of the conservation purpose or purposes being served by thedonation;
b. The fair market value of land being donated in the absence of any easementor other restriction;
c. The public benefit derived from the donation;
d. The extent to which water quality best management practices will beimplemented on the property; and
e. Whether the property is fully or partially forested and a forestmanagement plan is included in the terms of the donation.
2. Applications for otherwise qualified donations of a less-than-fee interestshall be accompanied by an affidavit describing how the donated interest inland meets the requirements of § 170(h) of the United States Internal RevenueCode of 1986, as amended, and the regulations adopted thereunder. Theapplication with accompanying affidavit shall be submitted to the Departmentof Taxation, with a copy also provided to the Department of Conservation andRecreation.
3. a. No credit in the amount of $1 million or more shall be issued withrespect to a donation unless the conservation value of the donation has beenverified by the Director of the Department of Conservation and Recreation,based on the criteria adopted by the Virginia Land Conservation Foundationfor this purpose. Such criteria and subsequent amendments shall be exemptfrom the Administrative Process Act (§ 2.2-4000 et seq.), but the VirginiaLand Conservation Foundation shall provide for adequate public participation,including adequate notice and opportunity to provide comments on the proposedcriteria. The Director shall act on applications within 90 days of hisreceipt of a complete application and shall notify the taxpayer and theDepartment of Taxation of his action.
b. For purposes of determining whether a credit requires verification of theconservation value, the credits allowed under this article with respect todonations of any other portion of a recorded parcel of land within thepreceding 11 years shall be aggregated with the credit claimed for thecurrent donation. This subdivision shall not apply if (i) all owners of theparcel who have been allowed credit for a qualified donation are notaffiliated with the person or entity seeking credit for the current donationof a different portion of the parcel and (ii) in the case of an individualseeking credit, the individual has not previously made a qualified donationfor any portion of the parcel and is not an immediate family member of anysuch owners.
c. If (i) the real property that is the subject of the donation waspartitioned from or part of another parcel of land and any other portion ofsuch parcel, or any land partitioned from such parcel of land, has beenallowed a tax credit under this article (or an application for tax credit ispending) within three years of such donation and (ii) the tax credit thatwould otherwise be allowed to the donor for such donation is at least$250,000, then no credit under this article shall be issued with respect tosuch donation described in clause (i) unless the conservation value of thedonation has been verified by the Director of the Department of Conservationand Recreation. The Director shall act on applications within 90 days of hisreceipt of a complete application and shall notify the taxpayer and theDepartment of Taxation of his action. Nothing in this subdivision shall beconstrued or interpreted (i) as allowing additional tax credit for any landor interest in land previously conveyed for which tax credit has already beenallowed under this article or (ii) affecting the validity of any tax creditallowed under this article for a prior conveyance of any land or interest inland.
4. a. Tax credits shall be issued on a calendar year basis, and in no caseshall the Department issue more than the maximum allowed for the calendaryear. For donations made in calendar year 2007 the maximum allowed is $100million. The credits shall be issued in the order that each completeapplication is received. If more than one application is received at the sametime, the credits with respect to those applications shall be issued in theorder that the conveyances were recorded in the appropriate circuit court ofthe Commonwealth. In the event that a credit requires verification of theconservation value by the Department of Conservation and Recreation and suchverification has not been received at the time the maximum $100 millionallowed is reached for the calendar year of the donation, such credit shallnot be issued for that calendar year but shall be issued in the calendar yearthat the conservation value of the credit is verified by the Department ofConservation and Recreation.
b. Beginning with calendar year 2008, the $100 million amount contained insubdivision 4 a shall be increased by an amount equal to $100 millionmultiplied by the percentage by which the consumer price index for all-urbanconsumers published by the United States Department of Labor (CPI-U) for the12-month period ending August 31 of the preceding year exceeds the CPI-U forthe 12-month period ending August 31, 2006.
5. (Effective for taxable years beginning before January 1, 2011) a. Anytaxpayer that has been issued a tax credit by the Department shall be allowedto use such credit for his or its taxable year that begins in the calendaryear for which such credit was issued and for succeeding taxable years inaccordance with the 10 consecutive taxable year carryforward provisions ofthis article, except for any taxpayer affected by the credit limitation fortaxable years 2009 and 2010. Such a taxpayer shall be allowed to use suchcredit for his or its taxable year that begins in the calendar year for whichsuch credit was issued and for succeeding taxable years in accordance withthe 12 consecutive taxable year carryforward provisions of this article.
b. Any taxpayer to whom a credit has been transferred may use such credit forthe taxable year in which the transfer occurred and unused amounts may becarried forward to succeeding taxable years, but in no event may suchtransferred credit be used more than 11 years after it was originally issuedby the Department or in any taxable year of such taxpayer that ended prior tothe date of transfer, except for any taxpayer affected by the creditlimitation for taxable years 2009 and 2010. Such a taxpayer may use suchcredit for the taxable year in which the transfer occurred and unused amountsmay be carried forward to succeeding taxable years, but in no event may suchtransferred credit be used more than 13 years after it was originally issuedby the Department or in any taxable year of such taxpayer that ended prior tothe date of transfer.
5. (Effective for taxable years beginning on or after January 1, 2011) a. Anytaxpayer that has been issued a tax credit by the Department shall be allowedto use such credit for his or its taxable year that begins in the calendaryear for which such credit was issued and for succeeding taxable years inaccordance with the 10 consecutive taxable year carryforward provisions ofthis article, except for any taxpayer affected by the credit limitation fortaxable years 2009, 2010, and 2011. Such a taxpayer shall be allowed to usesuch credit for his or its taxable year that begins in the calendar year forwhich such credit was issued and for succeeding taxable years in accordancewith the 13 consecutive taxable year carryforward provisions of this article.
b. Any taxpayer to whom a credit has been transferred may use such credit forthe taxable year in which the transfer occurred and unused amounts may becarried forward to succeeding taxable years, but in no event may suchtransferred credit be used more than 11 years after it was originally issuedby the Department or in any taxable year of such taxpayer that ended prior tothe date of transfer, except for any taxpayer affected by the creditlimitation for taxable years 2009, 2010, and 2011. Such a taxpayer may usesuch credit for the taxable year in which the transfer occurred and unusedamounts may be carried forward to succeeding taxable years, but in no eventmay such transferred credit be used more than 14 years after it wasoriginally issued by the Department or in any taxable year of such taxpayerthat ended prior to the date of transfer.
6. Neither the verification of conservation value by the Department ofConservation and Recreation nor the issuance of a credit by the Department ofTaxation shall in any way be construed or interpreted as prohibiting theDepartment of Taxation or the Tax Commissioner from auditing any creditclaimed pursuant to the provisions of this article or from assessing taxrelating to the claiming of any credit under this article.
E. In any review or appeal before the Tax Commissioner or in any court in theCommonwealth the burden of proof shall be on the taxpayer to show that thefair market value and conservation value at the time of the qualifieddonation is consistent with this section and that all requirements of thisarticle have been satisfied.
(1999, cc. 968, 983; 2005, c. 940; 2006, Sp. Sess. I, cc. 4, 5; 2009, cc. 12,510; 2010, cc. 246, 265, 321, 384.)
