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Virginia's tax credit program has been tightened Date published: 5/1/2007
RELATED: Land tax credits rejected by state
By RUSTY DENNEN Virginia has one of the most generous tax-credit programs in the nation, one that has been credited with preserving tens of thousands of acres in recent years. But the program has been tweaked by lawmakers, who see it as a little too generous and a drain on state revenue. Last year the Virginia General Assembly set a cap--$100 million--on the total yearly value of credits that can be issued under the Land Conservation Tax Credit Program. Also, the amount landowners can claim for credits dropped from 50 percent of the appraised value, to 40 percent. For example, if a landowner donates an easement valued at $1 million, he can claim tax credits of $400,000. Conservation easements allow landowners to preserve land in perpetuity while getting a tax break in return. The value of some conservation easements has become an issue. The Virginia Department of Taxation last year questioned the appraisal on a tract in New Kent County and sent independent appraisers to re-crunch the numbers. New Kent County is southeast of Richmond, bordered by the Chickahominy, York and Pamunkey rivers. As a result, the tax agency proposed cutting the amount of credits claimed by 89 percent. That dropped the value from $18 million to about $2 million. No other similar cases are pending in the courts, a department spokesman said. Rusty Dennen: 540/374-5431Email: rdennen@freelancestar.com
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